Construct · 1 fields · 1 citations

Leland model: a standalone construct

One name. One construct. A landmark on the map.

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Lelandmodel1 CONSTRUCTLeland modelLELAND · CORPORATE FINANCE

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Corporate finance

structural model that values risky debt and sets optimal leverage by trading off tax benefits against bankruptcy costs with an endogenous default boundary.

In corporate finance, Leland model refers to structural model that values risky debt and sets optimal leverage by trading off tax benefits against bankruptcy costs with an endogenous default boundary. This meaning comes from Leland (1994) in The Journal of Finance.[1]

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Nearby constructs

boundary4 fields · 4 citationsjingle · one word, four constructsdebt3 fields · 3 citationsjingle · one word, three carriersdefault3 fields · 3 citationsjingle · one word, three constructs

References

  1. Leland, H. E. (1994). Corporate Debt Value, Bond Covenants, and Optimal Capital Structure. The Journal of Finance, 49(4), 1213-1252. https://doi.org/10.1111/j.1540-6261.1994.tb02452.x

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