The timing of debt renegotiation and its implications for irreversible investment and capital structure
研究了单轮债务重组对投资和融资决策的影响，证明最优重组时机即违约时机，重组使投资加速并提升投资期权价值约15%，且重组盈余随项目风险增加而增加、随沉没成本增加而减少。
This paper analyzes the impact of a single round of debt renegotiation on investment and financing decisions. We produce an analytical proof for the widely-used assertion that optimal renegotiation time is common default time. We show that debt renegotiation accelerates investment and increases the investment option value by around 15%. Renegotiation surplus increases with project risk but decreases with sunk cost. Investment option value has an inverted U-shaped link with debtholders' bargaining power. If tax rate is moderate, optimal leverage with renegotiation is greater than that without renegotiation but if it is sufficiently high, the opposite holds true.