Notice of RetractionA normative analysis on liquidity risk management

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

The firm´s objective is to match the effective maturity of its liabilities across several financing cycles, rather than to lengthen the maturity of the current bonds outstanding. When a firm is unable to meet its debt, it may have to seek more expensive sources of funds or even liquidate its assets. This paper provides a normative study of minimizing such debt payment risk through the optimal dynamic choice of the maturity structure of debt. The conclusion is that short-term financing is helpful for a firm with good financial position to readjust its maturity structure more quickly in response to value swings of the assets.