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Working Papers (1993), ESSEC Business School

Cost-of-capital Relationships under Debt Level Uncertainty : The Case of Stochastic Continuous Cash-flows and a Fixed Leverage Ratio

Standard Modigliani-Miller cost-of-capital formulae are reconsidered in the case where the future level of the firm's debt is stochastic, and the firm's cash-flows follow any arbitrary diffusion process.

PONCET, P. and PORTAIT, R. (1993). Cost-of-capital Relationships under Debt Level Uncertainty : The Case of Stochastic Continuous Cash-flows and a Fixed Leverage Ratio. ESSEC Business School.