This paper develops a new model of debt renegotiation in a structural framework, that accounts for both taxes and … coupon reduction to creditors, given that the new coupon is chosen such that debt value remains constant. Our result shows … firm without hurting the creditors. This model of debt renegotiation can be viewed as a way of passing from a junk bond to …

investments with debt. We find that flexibility in replenishing or liquidating inventory, by providing risk shifting incentives … full benefits of additional operating flexibility, irrespective of their leverage, by entering simple debt contracts of the …

advantages of debt against the risk of costly default. The costs of default are endogenous: bankrupt firms are forced to …, firms’ investment is too low and, although the capital structure is chose optimally, in equilibrium too little debt is used …

Structure of financing: How much debt should I incorporate in my firm? The article studies some aspects related to the … structure of financing. Particularly, it analyzes if is good to be gotten into debt and, in case that it be, in which conditions … a business should incorporate debt. As a framework, the contribution of Modigliani and Miller is utilized. Then, a …

, trading off the tax advantages of debt against the risk of costly default. The costs of bankruptcy are endogenously determined … constrained inefficient. In particular there is too little debt and too little default. …

to firing costs. Our main finding, however, is that firms that restructure their debt in response to distress are more …

, these firms tapped the debt market, and partly built cash reserves. Employment decreased by 5.2%. Chinese suppliers suffered …

financing (debt and equity), tax aggressiveness behavior, earning management, compensation practices, agency cost of debt and …