Capital structure and debt priority
Sami Attaoui and
Post-Print from HAL
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)
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00756211
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.
Journal Article: Capital Structure and Debt Priority (2013)
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)
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00756211
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().