Debt Overhang: Loan Commitments
0
1150
0
550
Stockholders
claim
4100
5550
(4500x1.1
+600)
2400
4450
(3500x1.1
+600)
Bondholders
claim
4100
6700
2400
5000
Firm
Cashflows
Recessn
Boom
Recessn
Boom
Firm W/ Proj
Firm W/o Proj