The finance literature looks at a number of factors to explain risk premia in corporate debt, such as liquidity effects …, jump-to-default risk, and contagion risk. Stochastic re-covery rates as a source of systematic risk have not received much … that differently-ranking debt instruments of the same issuer face identical default risk but different default …

Asset Pricing, Default Risk. - The central question of this thesis is whether firm distress risk explains stock returns …. This question is important because it has been suspected that distress risk might reconcile a growing evidence on patterns …