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It then extends the Leland model with priced stochastic asset volatility and derives semi-closed-form solutions. Calibrations to representative Baa and Aa firms show the puzzle is resolved at medium and long maturities. An alternative risk-premium specification serves as a check, and jumps are added to fit short maturities. The SVJ model is estimated firm by firm with simulated maximum likelihood on CDS and option data, and spreads are decomposed into loss and premium components. Extensions to endogenous default and optimal leverage follow, and the conclusion recaps the findings.",223 "writing_profile_keywords": [224 "structural credit model",225 "puzzle resolution",226 "calibration then estimation",227 "nested model comparison",228 "variance risk premium",229 "firm-level estimation"230 ],231 "confidence": 0.8,232 "notes": "How statistical significance is reported is not visible in the excerpts. 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