Doubling Down on Debt: Limited Liability as a Financial Friction
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We investigate how a combination of limited liability and preexisting debt distort firms investment and equity payout decisions. We show that equity holders have incentives to double-sell cash flows in default, leading to overinvestment, provided that the firm has preexisting debt and the ability to
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美国国家经济研究局创建时间：
2020-08-01
