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Cited by 591

The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.

Design and Valuation of Debt Contracts

Anderson, Ronald W., Sundaresan, Suresh·1996·Review of Financial Studies
DOI 10.1093/rfs/9.1.37
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Abstract

This article studies the design and valuation of debt contracts in a general dynamic setting under uncertainty. We incorporate some insights of the recent corporate finance literature into a valuation framework. The basic framework is an extensive form game determined by the terms of a debt contract and applicable bankruptcy laws. Debtholders and equityholders behave noncooperatively. The firm’s reorganization boundary is determined endogenously. Strategic debt service results in significantly higher default premia at even small liquidation costs. Deviations from absolute priority and forced liquidations occur along the equilibrium path. The design tends to stress higher coupons and sinking funds when firms have a higher cash payout ratio.

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Metadata

Authors
Anderson, R. W., & Sundaresan, S.
Venue
Review of Financial Studies
Publisher
Oxford University Press (OUP)
Published
1996-01
Volume
9
Issue
1
Pages
37-68
ISSN
  • 0893-9454 (ISSN-L)
  • 1465-7368
DOI
10.1093/rfs/9.1.37
OpenAlex
W2121799706
Cited by
591
References
1
FWCI
65.30
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Design and Valuation of Debt Contracts. https://app.cochat.ai/papers/10.1093/rfs/9.1.37
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Anderson, R. W., & Sundaresan, S. (1996). Design and Valuation of Debt Contracts. Review of Financial Studies. https://doi.org/10.1093/rfs/9.1.37

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.