Publication details for Professor Muhammed-Shahid EbrahimEbrahim, Muhammed-Shahid & Mathur, Ike (2001). The Pricing of Debt and Pareto-Optimal Financing under Endogenous Bankruptcy. International Journal of Theoretical and Applied Finance 4(3): 491-509.
- Publication type: Journal Article
- ISSN/ISBN: 0219-0249, 1793-6322
- DOI: 10.1142/s0219024901001085
- Further publication details on publisher web site
Author(s) from Durham
Using an agency theoretical framework, this paper extends the optimal capital structure literature by modeling the rivalry between equity and debt to arrive at some very fundamental results involving endogeneity of bankruptcy, equilibrium interest rates, pricing of risk-free/risky debt and pareto-optimal financing techniques.