Mr. Tang is a senior PhD student at the School of Finance and Statistics in Hunan University, Changsha, China. His research interests include corporate finance, risk management and loans guarantee. He has published several papers in peer-reviewed journals. He has earned his MSc in Computational Mathematics in 2010 from Xiangtan University, Xiangtan, China.
This paper considers an entrepreneur who has no assets in place but possesses an option to invest in a project incurring a lump-sum investment cost, of which a fraction must be financed by entering into an equity-for-guarantee swap.