Iancu, Dan A.; Trichakis, Nikolaos; Tsoukalas, Gerry - 2015
investments with debt. We find that flexibility in replenishing or liquidating inventory, by providing risk shifting incentives … effectiveness of practical and widely used covenants in restoring firm value by limiting such risk shifting behavior. We find that … full benefits of additional operating flexibility, irrespective of their leverage, by entering simple debt contracts of the …