The article explores how companies can choose the best mix of short and long-term debt to maximize profits while minimizing the risk of bankruptcy. By analyzing different debt structures, the researchers found that short-term debt can help align the interests of debt and equity holders, reducing the risk of financial problems. They also discovered that the tax benefits of debt need to be balanced against the costs of bankruptcy and agency issues when deciding on the best debt maturity. The study's model accurately predicts leverage, credit spreads, default rates, and bond prices, providing valuable insights for managing bond portfolios.