  We study a singular stochastic control problem faced by the owner of an
insurance company that dynamically pays dividends and raises capital in the
presence of the restriction that the surplus process must be above a given
dividend payout barrier in order for dividend payments to be allowed.
Bankruptcy occurs if the surplus process becomes negative and there are
proportional costs for capital injection. We show that one of the following
strategies is optimal: (i) Pay dividends and inject capital in order to reflect
the surplus process at an upper barrier and at 0, implying bankruptcy never
occurs. (ii) Pay dividends in order to reflect the surplus process at an upper
barrier and never inject capital --- corresponding to absorption at 0 ---
implying bankruptcy occurs the first time the surplus reaches zero. We show
that if the costs of capital injection are low, then a sufficiently high
dividend payout barrier will change the optimal strategy from type (i) (without
bankruptcy) to type (ii) (with bankruptcy). Moreover, if the costs are high,
then the optimal strategy is of type (ii) regardless of the dividend payout
barrier. The uncontrolled surplus process is a Wiener process with drift.
