| Debt
Overhang: Senior Debt |
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| • | One
Solution: |
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| • | If
the new project could be financed |
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| separately,
say, under debtor-in-possession |
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| financing,
or a new issue that would be |
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| senior
to the previous issue, then (assuming |
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| a
riskfree rate of 10%), the new project |
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| would
be undertaken; and bondholders |
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| would
be better off. |
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