This paper develops a new model of debt renegotiation in a structural framework, that accounts for both taxes and … coupon reduction to creditors, given that the new coupon is chosen such that debt value remains constant. Our result shows … firm without hurting the creditors. This model of debt renegotiation can be viewed as a way of passing from a junk bond to …

We analyse the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the … first part of the paper we study the optimal debt contract--specifically, the trade-off between the size of the loan and the … repayment--under the assumption that some debt contract is optimal. In the second part we consider a more general class of (non-debt …

development expenditures at the time of debt contracting, are associated with less restrictive default clauses, especially in bond …

zero debt and almost 22% have less than 5% book leverage ratio. Zero-leverage behavior is a persistent phenomenon. Dividend …) ownership and longer CEO tenure are more likely to have zero debt, especially if boards are smaller and less independent. Family …

This paper examines whether debt renegotiation mitigates the agency costs of asset substitution. Inspired by the … firm that has the option to switch to a higher risk activity and renegotiate the terms of the debt. Our model creates a … substitution. Our findings indicate that, in most cases, debt renegotiation substantially reduces agency costs of asset …

An important gap exists in modern finance theory on the impact of labour market frictions on corporate debt policy … study recommends promotion of corporate policies that strengthen conservative debt usage in industries where human capital …