Research On The Impact Of Debt Negotiation And Restructuring On Enterprise Investment And Financing Under Knightian Uncertainty

With the impact of Chinese economy entering the new normal and COVID-19,economic growth shifts,industrial transformation and upgrading,the real economy pressure is great,some enterprises have difficulty in operating,the repayment capacity is weakened,the debt defaults are frequent,and the bank’s asset liability statement is increasingly "Ugly".The market-oriented debt-to-equity negotiation and reorganization,as a major measure to reduce leverage,de-capacity,regulate structure,and control risks in China,has attracted great attention from the government,enterprises and banks.Based on this,this thesis focuses on the influence mechanism of debt negotiation and reorganization such as debt-to-equity swaps and strategic debt service.First of all,a vague and uncertain model that conforms to Chinese financial practice is constructed.Furthermore,research the optimal debt reorganization strategy,the advantages of some debt-to-equity restructuring,and its influence mechanism for the investment and financing decision-making behavior of some debt-to-equity restructuring.Then,from the perspective of Knightian uncertainty,research strategic debt-based negotiation reorganization and reorganization decision-making on enterprises’ investment and financing,negotiated reorganization,and further analyzed the advantages and disadvantages of different debt reorganization methods such as debt-to-equity switching,strategic debt service,and direct bankruptcy and liquidation.Finally,inspect how Knightian uncertainty affects the value of the optimal debt negotiation,reorganization,reorganization strategy,and the value of debt participants.The research of this article has a large theoretical innovation,and has contributed to the improvement and improvement of Chinese debt consultation reorganization.It can provide important theoretical support and practical guidance for how Chinese government and enterprises carry out market-oriented debt-to-equity swaps.The specific research of this article is as follows.First,in response to the debt-to-equity transfer issues that financial institutions such as Chinese governments,enterprises,and banks have focused on the issue of the debt-to-equity switching,this degree thesis uses physical options to conduct research on how to affect the company’s optimal investment and financing decision-making decisions.Essence Through the introduction of Knightian uncertainty to build a market-oriented debt-to-equity pricing model,some debt-to-equity companies’ securities value and optimal investment and financing decisions were obtained under Knightian uncertainty,and a static analysis of some debt-to-equity resale was analyzed.The results show that compared to bankruptcy liquidation,debt-to-equity can increase the value of project options.The option value of the project has declined as the company’s shareholders’ negotiation capacity increases,and the optimal investment level rises with it.In addition,the company’s optimal investment level decreases with the increase in the average growth rate of the company’s income flow,but with the ability to negotiate negotiation,the volatility of the income flow,the company’s tax rate,the bankruptcy loss rate,the risk-free interest rate,and the degree of Knightian uncertainty increases;the proportion of project options and the optimal reink debt is the increase function of the volatility of the income flow.A reduction function is employed to gauge shareholders’ negotiation capacity,tax rate,and risk-free interest rate.The results of the above income have made the theoretical research of debt-to-equity swaps more complete,and provided theoretical basis for reality.Secondly,this thesis further introduces Knightian uncertainty into the strategic debt service negotiation and restructuring model,and deeply studies the influence mechanism of Knightian uncertainty on the strategic debt service negotiation and restructuring strategy and investment and financing decisions of enterprises.In addition,a comparative analysis was carried out on the negotiated restructuring of debt-for-equity swap to explore the impact of ambiguity and uncertainty on different debt negotiation and restructuring methods.The results show that compared with debt restructuring methods such as bankruptcy liquidation and total debt-to-equity swap,strategic debt service can increase enterprise value,achieve Pareto improvement,and improve social welfare.Strategic debt service accelerates corporate project investment;Strategic debt service increases enterprise value by reducing the risk of corporate bankruptcy and the cost of bankruptcy losses,but at the same time increases corporate leverage;In addition,ambiguous uncertainty will delay the timing of project investment,but advance the timing of debt negotiation restructuring.Finally,based on the above conclusions,this thesis puts forward the following policy recommendations.When stimulating enterprise investment,the government should fully consider the role of ambiguity and uncertainty,take measures to improve the information disclosure of enterprises on investment projects,and reduce the degree of ambiguity and uncertainty of investors’ investment projects;For enterprises in industries with low shareholder negotiation power and project cash flow volatility,the government’s policy to stimulate enterprise investment can be smaller,and on the contrary,investment stimulus should be increased;When the government is vigorously promoting market-oriented debt-to-equity swaps,it should consider the impact of the company’s shareholders’ ability to negotiate and negotiate on it.In addition,whether corporate project investors invest in high-risk projects should make decisions based on their own vague uncertainty about the future cash flow of the project;For enterprises,it is necessary to fully consider that the shareholders of the enterprise have a significant impact on their optimal debt negotiation and restructuring methods,and for enterprises with weak negotiation ability,they should choose part of the debt-to-equity swap for negotiation and restructuring,while for enterprises with strong negotiation ability,choose all debt-to-equity swap negotiation and restructuring.The study of this degree thesis has high innovation,and has a great theoretical contribution to the improvement and development of corporate debt consultation and reorganization.Providing theoretical guidance and practical direction,this thesis offers insight into how my nation’s governments,businesses,and banks execute market-oriented debt-to-equity swaps.