When I work with a group that wants to complete a task but spends no time developing a cooperative relationship, I generally find their work product to be merely satisfactory. The product meets minimum standards, but typically the dynamic within teams that spend no time on relationship development is not condusive to innovation or creativity. [...]
The management option to alter the capital structure establishes the link between structural models and fundamental credit analysis. It may be remembered that in the Merton framework the strike price of both the call and the put option on the firm’s assets changes when the capital structure of a company changes. This is undoubtedly one [...]
Additional features of commercial applications include, for example, time-varying default barriers, continuous monitoring of the default threshold, the use of alternative option pricing models and different assumptions for the behavior of asset values. They typically incorporate short-term and long-term liabilities, convertible debt, preferred equity and common equity, although this substantially enhances complexity of the model. [...]