Why would this haapen? Is it a common occurence? I really don't follow
the logic. Since it is known that there is going to be more debt
issued, why lower the current amount of debt? Wouldn't this make the
equity less risky for no reason at all prior to the extra debt being
issued.
I can answer the questions to this problem, but I just don't understand
why or how "marking the value of the debt" down occurs? Any insight on
this problem would be appreciated.
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