model predicts the negative impact of inflation on real equity values is stronger for low leverage firms. We find empirical … asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal … coupons and sticky profitability. Taken together, these two frictions result in higher real equity prices and credit spreads …

We propose a tractable model of a firm's dynamic debt and equity issuance policies in the presence of asymmetric …

-levering procedure is around for the case of risk-free debt. The procedure for risky debt is much less clear even under very simplifying …