Federal ID: 91-6001537
ISSN: 0022-1090 (Print) | 1756-6916 (Online)
Debt Maturity and Investor Heterogeneity
Matthew Darst and Ehraz Refayet ♦ This paper studies how investor heterogeneity impacts equilibrium debt maturity. The optimal issuance strategy combines both long- and short-term debt. Long-term debt contains default risk, but hedges against intermediate downturns. Short-term debt provides repayment…