Luciano, Elisa; Nicodano, Giovanna - Collegio Carlo Alberto, Università degli Studi di Torino - 2012
by their de- fault probabilities, recovery rates and credit spreads. Each combina- tion offers protection against default …This paper analyzes how combining firms into either groups or conglomerates affects their credit standing, as measured … to its affiliates, and issues debt to optimize the trade-off between tax gains and default costs. In a group, the …