The programs require at least MATLAB version 7.0

The following are the main programs used for the computations in the paper:

investorreturn(eta,c,mu,sigma,r_m,d): Computes the return to the investor 
facevalue(eta,c,mu,sigma,r_m,d): Computes the face value of the debt contract
defaultprob(eta,c,mu,sigma,r_m,d): Computes the default probability

The programs take vectors as inputs. The input variables are

eta: % of assets retained by borrower in case of bankruptcy
c:   bankruptcy costs
r_m: reservation return of the entrepreneur
d: % of debt finance (1-d is equity)

For more details about the variable, please see the paper


The density of the return distribution is given in m-file density.m

density(x,mu,sigma) is the value of the density at x given

mu: Mean of return distribution
sigma: Standard

The default is a normal distribution. In order to switch to a T-distribution
please comment/uncomment the respective part of the file.