المستخلص: |
Knowledge of debt capacity is central for the appraisal of the risk involved in debt financing. Such knowledge is indispensible for rating agencies, credit enhancement banks, debt issuers, and institutional investors. In this paper, we synthesize extant, disjoint literature in order to inductively generate a set whose non- collectively exhaustive elements may characterize a debt capacity measure that is capable of separating between different types of debt issuing firms. In this respect, we are mainly motivated by the rather scant literature concerning debt capacity measurement and explanation given the significance of the subject in the course of the current international financial crisis. Our exposition is thus inductive in nature; however, we offer a possibility for future positive research concerning parsimoniously specifying debt capacity.
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