Macroeconomic Conditions and the Puzzles of Credit Spreads and Capital Structure
I build a dynamic capital structure model that demonstrates how business-cycle variations in expected growth rates, economic uncertainty, and risk premia influence firms' financing and default policies. Countercyclical fluctuations in risk prices, default probabilities, and default losses arise...
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| Format: | Article |
| Language: | English |
| Published: |
American Finance Association,
2011-09-01T21:22:31Z.
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| Online Access: | Get fulltext |