In this paper, we extend the framework of Leland's 94 by examining corporate debt, equity and firm values with jump-difffusion processes. We choose two kinds of jumps such as the uniform and double exponential jumps to model the distribution of the log jump sizes. By this choice, we are able to...

Convertible bond, a hybrid instrument that offers the holders both fixed income of straight debt and capital gain of equity via attachment of the right to convert to common shares of issuing companies, has recently been issued in mass by important Vietnamese banks and groups. To account for this...

The recent financial crisis has brought about the need to revise capital structure of several large banks, which raises the question about a new kind of financial instrument that can enhance the loss absorption of the banks in bad time and still overcome their reluctance to issue equity in good...