Arnold, Lutz G. and Hartl, Johannes (2013) CORPORATE INSURANCE WITH SAFETY LOADINGS: A NOTE. JOURNAL OF RISK AND INSURANCE, 80 (4). pp. 1087-1094. ISSN 0022-4367, 1539-6975
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In a article in this journal, Schnabel and Roumi () assert that if uninsured debt is risky, a levered firm takes a casualty insurance with a positive safety loading if, and only if, the amount of debt is sufficiently high. This note shows that in marked contrast to this assertion, the correct conclusion from their model is that the firm generally takes insurance for low levels of risky debt, and it depends on the magnitude of the loading whether it also takes insurance for high levels of debt.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | UNDERINVESTMENT PROBLEM; BOND COVENANTS; |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Theoretische Volkswirtschaft (Prof. Dr. Lutz Arnold) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 25 Mar 2020 05:38 |
| Last Modified: | 25 Mar 2020 05:38 |
| URI: | https://pred.uni-regensburg.de/id/eprint/15574 |
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