On the Matter of Parity among Financial Obligations

WILBUR G. LEWELLEN, Douglas Emery

Research output: Contribution to journalArticle

14 Scopus citations

Abstract

The lessons of the leasing literature concerning the impact of leases on the debt capacity of a firm are reviewed and summarized to establish an approach to the analysis of the corporate bond refunding decision. A general proposition regarding financial obligation parity is established, and from that a clear bond refunding decision rule is developed. Previous debates in the literature about appropriate discount rates and about the appropriate cash flows to be discounted for refunding decisions are clarified. 1981 The American Finance Association

Original languageEnglish (US)
Pages (from-to)97-111
Number of pages15
JournalThe Journal of Finance
Volume36
Issue number1
DOIs
StatePublished - Jan 1 1981
Externally publishedYes

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ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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