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Repeated dilution of diffusely held debt

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Figure

Table 1 contains the explicit expressions of the constants (a A , b A , c A ) for all asset A(x t ), as well as the abandonment points of (a) the unlevered firm, ˜ y, (b) the levered firm with non-renegotiable debt, y f , (c) the first renegotiation point
Figure 1: The Unlevered Firm
Table 1: Closed-Form Asset Pricing Formulas in the GBM-Linear Structure.
Table 2: Type of Debt and Optimal Contract.

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