Abstract
Cheung and Satchell (2008a and b) address the default-triggered acquisition issue and derives some analytical results for risky bond pricing. Instead of modelling from the bond investors' point of view, this paper analyses the default-triggered acquisition problem from the potential acquirers' perspective and develops a structural model of a potential acquirer's position, the European option-to-acquire, with analytical results. A comprehensive numerical comparative static analysis is also undertaken which provides some insights for the Greeks of the option.
| Original language | English |
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| Publication status | Unpublished - 2008 |