Faculty Digital Archive

Archive@NYU >
Stern School of Business >
Finance Working Papers >

Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/28301

Title: Efficient Recapitalization
Authors: Philippon, Thomas
Schnabl, Philipp
Issue Date: 18-Sep-2009
Series/Report no.: FIN-09-014
Abstract: We analyze public interventions to alleviate debt overhang among private rms when the government has limited information and limited resources. We compare the e¢ ciency of buying equity, purchasing existing assets, and providing debt guarantees. With sym- metric information, all the interventions are equivalent. With asymmetric information between rms and the government, buying equity dominates the two other interven- tions. We solve for the optimal intervention, and show how it can be implemented with subordinated loans and warrants.
URI: http://hdl.handle.net/2451/28301
Appears in Collections:Finance Working Papers

Files in This Item:

File Description SizeFormat
philippon_schnabl.pdf547.51 kBAdobe PDFView/Open

Items in Faculty Digital Archive are protected by copyright, with all rights reserved, unless otherwise indicated.


The contents of the FDA may be subject to copyright, be offered under a Creative Commons license, or be in the public domain.
Please check items for rights statements. For information about NYU’s copyright policy, see http://www.nyu.edu/footer/copyright-and-fair-use.html 
Valid XHTML 1.0 | CSS