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Employee Costs of Corporate Bankruptcy
Graham, John R. - 2019
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
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Financial Distress in the Great Depression
Graham, John R. - 2011
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
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Managerial Miscalibration
Ben-David, Itzhak - 2010
Using a unique 10-year panel that includes more than 13,300 expected stock market return probability distributions, we find that executives are severely miscalibrated, producing distributions that are too narrow: realized market returns are within the executives' 80% confidence intervals only...
Persistent link: https://www.econbiz.de/10012462440