't Veld, Klaas T. van; Rausser, Gordon C.; Simon, Leo K. - Department of Agricultural and Resource Economics, … - 2000
The model presented in this paper juxtaposes two theories for why a firm might offer creditors a security interest to back up a loan. One theory holds that issuing secured debt allows the firm's owners to reduce expected payments in the event of bankruptcy to so-called "non-adjusting" creditors,...