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| Tekijä: | Chen, S.-S. |
| Otsikko: | The determination of the seniority structure of debt: theory and evidence |
| Lehti: | Review of Quantitative Finance and Accounting
1999 : JUL, VOL. 13:1, p. 5-28 |
| Asiasana: | Assets Risk analysis Investment appraisal Financial accounting |
| Kieli: | eng |
| Tiivistelmä: | The purposes of this paper are to provide a theory of determining the firm's optimal seniority structure of debt and examine the relation between the firm's seniority structure of debt and its characteristics. The authors develop a theoretical model which explicitly includes the benefits and costs associated with senior debt financing, corporate taxes, risk-aversion in the optimal trade-off among the present values of the advantage of debt, loss of tax credits, expected costs of financial distress, costs of senior debt financing, and benefit of limited liability. |
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