We analyze the significance of the debt overhang problem for a large sample of UK firms. We find little evidence that debt overhang affects the firm's ability to raise equity and the likelihood of firm failure. We also examine a large sample of financially distressed firms that succeeded in...

I document a large and significant diversification discount in multi-division firms that are diversified neither industrially nor geographically. All divisions of these firms, which are called quot;pseudo-conglomeratesquot;, operate in the same finely defined industry. Since divisions of...