Debt dynamics with fixed issuance costs

• 成果类型: Article
• 署名作者: Benzoni, Luca; Garlappi, Lorenzo; Goldstein, Robert S.; Ying, Chao
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago; University of British Columbia; University of Minnesota System; University of Minnesota Twin Cities; National Bureau of Economic Research; University of Minnesota System; University of Minnesota Twin Cities; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.07.006
• 发表日期: 2022
• 页码: 385-402
• 关键词: capital structure; Debt dynamics; COMMITMENT; Issuance costs; Debt maturity

摘要

We investigate equilibrium debt dynamics for a firm that cannot commit to a future debt policy and is subject to a fixed restructuring cost. We formally characterize equilibria when the firm is not required to repurchase outstanding debt prior to issuing additional debt. For realistic values of issuance costs and debt maturity, the no-commitment policy generates tax benefits that are similar to those obtained by a benchmark policy with commitment. For positive but arbitrarily small issuance costs, there are maturities for which sharehold-ers extract essentially the entire claim to cash-flows.(c) 2022 Elsevier B.V. All rights reserved.