Arnold, Lutz G.; Hartl, Johannes - Wirtschafts- und Sozialwissenschaftliche Fakultät, … - 2011
In a paper in this journal, Schnabel and Roumi (1989) assert that if uninsured debt is risky, a levered firm takes a casualty insurance with a positive safety loading if, and only if, the amount of debt is sufficiently high. This note shows that, in marked contrast to this assertion, the correct...
