arXiv Open Access 2020

A closed-form solution to the risk-taking motivation of subordinated debtholders

Yuval Heller SharonPeleg-Lazar Alon Raviv

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Abstrak

Black and Cox (1976) claim that the value of junior debt is increasing in asset risk when the firm's value is low. We show, using closed-form solution, that the junior debt's value is hump-shaped. This has interesting implications for the market-discipline role of banks' junior debt.

Topik & Kata Kunci

econ.TH

Penulis (3)

Yuval Heller

SharonPeleg-Lazar

Alon Raviv

Format Sitasi

APA MLA BibTeX

Heller, Y., SharonPeleg-Lazar, Raviv, A. (2020). A closed-form solution to the risk-taking motivation of subordinated debtholders. https://arxiv.org/abs/2006.15309

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Informasi Jurnal

Tahun Terbit: 2020
Bahasa: en
Sumber Database: arXiv
Akses: Open Access ✓