The Bond Scheduling Problem of the Multi-Subsidiary Holding Company

Kenneth R. Baker and James H. Vander Weide
Additional contact information
Kenneth R. Baker: Dartmouth College
James H. Vander Weide: Duke University

Management Science, 1982, vol. 28, issue 7, 738-748

Abstract: This paper presents a decision-theoretic model of the bond scheduling problem faced by a multi-subsidiary holding company such as AT&T or GTE. The objective is to minimize the total cost of bond flotations across all subsidiaries, where total cost is the sum of the yield paid to investors, the flotation expense associated with the preparation of each issue and the opportunity expense to each subsidiary of not meeting its request at the desired time. Our model suggests that the timing of bond issues is primarily a problem in trading off the diseconomies of issuing many bonds in one month with the penalty costs of delay. An efficient dynamic programming algorithm for solving the problem is also presented along with an example.

Keywords: corporate finance; finance-management (search for similar items in EconPapers)
Date: 1982
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.28.7.738 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:28:y:1982:i:7:p:738-748

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().