Based on the work of Suzuki, we consider a generalization of Merton's asset valuation approach in which two firms are linked by cross-ownership of equity and liabilities. Suzuki's results then provide no arbitrage prices of firm values, which are derivatives of exogenous asset values. In...

There exists a simple, didactically useful one-to-one relationship between stopping times and adapted càdlàg (RCLL) processes that are non-increasing and take the values 0 and 1 only. As a consequence, stopping times are always hitting times. Furthermore, we show how minimal elements of a...