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The Valuation of Corporate Liabilities as Compound Options: A Correction

Robert Geske, H. E. Johnson

Journal of Financial and Quantitative Analysis · 1984 · Volume 19 · Issue 2

DOI: 10.2307/2330900

Abstract

Geske derived in [1] expressions for the values of junior and senior debt and equity. In this paper, some confusion about these expressions is cleared up, and an error is corrected. We use the same notation as in [1].

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