Previous estimates of the mean 3-year buy-and hold abnormal returns of German IPO stocks range from -52.20% to 1.66%. It is difficult to justify this significant variation in abnormal returns, given the almost identical calculation procedures and the large overlap in sample periods. We argue...

We develop a dynamic model of a firm in which cash management is partially delegated to a self-interested manager. Shareholders trade off the cost of dismissing the manager with the cost of managerial discretion over the use of liquid funds. An improvement in corporate governance quality may...

We argue that the Merton (1974) model's relatively high ability to forecast bankruptcy stems from its ability to capture either the chance of net worth dropping below an externally-imposed threshold or of an economic insolvency. Using unique bankruptcy data from fifteen countries, our evidence...

We offer evidence suggesting a significantly negative relation between firm-level distress risk and the cross-section of corporate bond returns, analogous to the often negative relation between distress risk and stock returns found in prior studies ("distress anomaly"). Our evidence casts doubts...