Economics at your fingertips  

Capital structure and debt priority

Sami Attaoui and Patrice Poncet
Additional contact information
Patrice Poncet: ESSEC Business School

Post-Print from HAL

Abstract: In a simple structural model, we derive closed form solutions for the market values of a defaultable firm's debt and equity when debt has a heterogeneous priority structure - under the form of senior and junior bonds - and the absolute priority rule prevails. The firm is subject to liquidity and solvency risks and liquidation is immediate upon bankruptcy. We investigate the two-sided issue of optimal capital structure and optimal debt priority. We also examine the spread differential between senior and junior bonds

Keywords: Capital structure; Debt priority structure; Liquidation; Default probability; Credit spread (search for similar items in EconPapers)
Date: 2011-12-20
References: Add references at CitEc
Citations: Track citations by RSS feed

Published in AFFI 9th International Paris Finance Meeting, Dec 2011, Paris, France. 44 p

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Capital Structure and Debt Priority (2013) Downloads
Working Paper: Capital structure and debt priority (2013)
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:

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2023-09-12
Handle: RePEc:hal:journl:hal-00756211