search query: @author Cho, J. / total: 5
reference: 2 / 5
| Author: | Cho, J. |
| Title: | Implications of debt renegotiation for optimal bank policy and firm behavior |
| Journal: | Review of Quantitative Finance and Accounting
1997 : VOL. 8:2, p. 163-180 |
| Index terms: | FINANCE ACCOUNTING BANKING |
| Language: | eng |
| Abstract: | This paper analyses the problems associated with the renegotiation of debt contracts involving a bank (the lender) and a firm (the borrower) when the latter is operated by a risk averse manager. Firms undertake risky projects with loan capital borrowed from the bank. When a firm cannot pay off a loan it is technically bankrupt. Both the borrower and the lender may however experience a Pareto-improvement in their positions by renegotiating the loan. |
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