Bank bailouts are not ''one-shot'' events as commonly portrayed, but dynamic processes in which series of steps occur over time lasting for months or years. Regulators first ''catch'' financially-distressed banks and provide financial assistance. At this time, regulators also ''restrict'' banks'...

This paper presents a continuous time model of a firm that can dynamically adjust both its capital structure and its investment choices. The model extends the existing literature by endogenizing the investment choice as well as firm value, which are both determined by an exogenous price process...