Debt Contract under Imperfect Information: A Survey
The classical analysis in terms of supply and demand appear irrelevant when the problem at hand is related to lending, and to the credit market. The limits that are imposed to the level of a firm’s debt by its creditors, or the effect of a firm’s capital structure on its value are phenomena that would still remain unexplained had the supply-demand analysis been uniquely employed.
KeywordsCash Flow Credit Market Optimal Contract Contingent Contract Debt Contract
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