Semantic Scholar Open Access 1994 1136 sitasi

Corporate Debt Value, Bond Covenants, and Optimal Capital Structure

H. Leland.

Abstrak

This article examines corporate debt values and capital structure in a unified analytical framework. It derives closed-form results for the value of long-term risky debt and yield spreads, and for optimal capital structure, when firm asset value follows a diffusion process with constant volatility. Debt values and optimal leverage are explicitly linked to firm risk, taxes, bankruptcy costs, risk-free interest rates, payout rates, and bond covenants. The results elucidate the different behavior of junk bonds versus investment-grade bonds, and aspects of asset substitution, debt repurchase, and debt renegotiation. Copyright 1994 by American Finance Association.

Topik & Kata Kunci

Economics

Penulis (1)

H. Leland.

Format Sitasi

APA MLA BibTeX

Leland., H. (1994). Corporate Debt Value, Bond Covenants, and Optimal Capital Structure. https://doi.org/10.1111/J.1540-6261.1994.TB02452.X

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Informasi Jurnal

Tahun Terbit: 1994
Bahasa: en
Total Sitasi: 1136×
Sumber Database: Semantic Scholar
DOI: 10.1111/J.1540-6261.1994.TB02452.X
Akses: Open Access ✓