There have been 128 defaults among U.S. CDS reference entities between 2001 and 2020. Within this sample, the five-year CDS spread is a significant predictor of corporate default in models with equity market covariates and firm attributes. This finding holds for forecast horizons up to 12...

We develop a theoretical model quantifying how firm-level pandemic exposure and sentiment, as informational shocks, affect a firm’s credit spread and default risk. Consistent with model predictions, we find significantly positive impacts on single-name credit default swap (CDS) spreads from...

This study analyzes whether corporate financing policies of the US industrial firms have depended on borrowing costs during the last forty years. The results show that the impact is either zero or slightly negative. Even in the latter case, the results are economically insignificant. Overall,...

The theoretical model developed in this paper implies that equity value does not always increase with a firm's external growth opportunities, as suggested by the Gordon dividend growth model. There is a positive (negative) relation when the coefficient of constant relative risk aversion of a...