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We study corporate performance during and after the Great Depression for all industrial firms on the NYSE. Our first goal is to identify the factors that contribute to business insolvency and valuation during the period 1928 to 1938. To this end, we examine factors such as debt policy,...
Persistent link: https://www.econbiz.de/10003771611
An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a present value of 67 …. Compensating wage differentials for this “bankruptcy risk” are approximately 2.3% of firm value for a firm whose credit rating … falls from AA to BBB, about the same magnitude as debt tax benefits. Thus, wage premia for expected costs of bankruptcy are …
Persistent link: https://www.econbiz.de/10012905324
An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a cumulative present value … liquidated. Compensating wage differentials for this “bankruptcy risk” are approximately 2.3% of firm value for a firm whose … bankruptcy are of sufficient magnitude to be an important consideration in corporate capital structure decisions …
Persistent link: https://www.econbiz.de/10012868745
This paper quantifies the “human costs of bankruptcy” by estimating employee wage losses induced by the bankruptcy … wages begin to deteriorate one year prior to bankruptcy. One year after bankruptcy, the magnitude of the decline in annual … wages is 30% of pre-bankruptcy wages. The decrease in wages persists (at least) for five years post-bankruptcy. The present …
Persistent link: https://www.econbiz.de/10013007334
We use firm-level data to study corporate performance during the Great Depression era for all industrial firms on the NYSE. Our goal is to identify the factors that contribute to business insolvency and valuation changes during the period 1928 to 1938. We find that firms with more debt and lower...
Persistent link: https://www.econbiz.de/10013037628
An employee's annual earnings fall by 13% the year her firm files for bankruptcy, and the present value of lost … earnings from bankruptcy to six years following bankruptcy is 87% of pre-bankruptcy annual earnings. More worker earnings are … lost in thin labor markets and among small firms. Ex ante compensating wage differentials for this "bankruptcy risk" are …
Persistent link: https://www.econbiz.de/10013173238
This paper quantifies the “human costs of bankruptcy” by estimating employee wage losses induced by the bankruptcy … wages begin to deteriorate one year prior to bankruptcy. One year after bankruptcy, the magnitude of the decline in annual … wages is 30% of pre-bankruptcy wages. The decrease in wages persists (at least) for five years post-bankruptcy. The present …
Persistent link: https://www.econbiz.de/10013078355
An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a cumulative present value … liquidated. Compensating wage differentials for this "bankruptcy risk" are approximately 2.3% of firm value for a firm whose … bankruptcy are of sufficient magnitude to be an important consideration in corporate capital structure decisions …
Persistent link: https://www.econbiz.de/10012479872
Persistent link: https://www.econbiz.de/10012036285
We use firm-level data to study corporate performance during the Great Depression era for all industrial firms on the NYSE. Our goal is to identify the factors that contribute to business insolvency and valuation changes during the period 1928 to 1938. We find that firms with more debt and lower...
Persistent link: https://www.econbiz.de/10012461270