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Mathematical Model to Restructure Debt Through Some Scenarios with Equivalent Equations


García-Santillán Arturo
Pages: 01-26
ISBN: 978-93-5834-244-4


Recent Research Trends in Mathematics (Volume -2)

Recent Research Trends in Mathematics
(Volume - 2)

Abstract

The current health crisis derived from COVID 19 has become a serious threat to humanity. The collateral effects related to economic aspects are affecting companies, workers and, of course, families in general. The problems of financial insolvency are frequently present in debtors who have contracted a debt with their creditor. Therefore, the objective of the study is focused on modeling a debt restructuring proposal, through three hypothetical scenarios in which the debt is reconvened when some documents have expired and others are yet to expire. In each of the scenarios, the mathematical model is designed and subsequently corroborated in an Excel spreadsheet. The predominant variables in the restructuring are the adjustment rates used to update the past due promissory notes and the discount rates of those promissory notes that have not yet expired, capitalizations, transaction costs and, if applicable, whether the debt is in foreign currency. In this case, it is converted to the local currency, then the spot exchange rate is used.

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