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Alderson, Michael J. - In: Journal of financial economics 39 (1995) 1, pp. 45-69

Persistent link: https://www.econbiz.de/10001185910

Costly External Finance, Liquidity Risk, and Default Risk

Yang, Jun - 2011

I use the 2007-2008 financial crisis to gauge how internal financial resources and external financial constraints mitigate or worsen the impact of the crisis on default risk of US industrial firms. I identify heterogeneity in short-term funding needs at the onset of the crisis by exploiting...

Persistent link: https://www.econbiz.de/10013128496

Cash Holdings and Credit Risk

Acharya, Viral V. - 2011

Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding can be explained by the precautionary motive for...

Persistent link: https://www.econbiz.de/10013125920

Orderly Liquidation Authority as an Alternative to Bankruptcy

Pellerin, Sabrina - 2013

In response to the financial crisis of 2007, Congress created the Orderly Liquidation Authority (OLA) as part of its overarching financial regulatory reform bill, the Dodd-Frank Act. The OLA's provisions are aimed at simultaneously addressing two conflicting goals - mitigating systemic risk,...

Persistent link: https://www.econbiz.de/10013089352

CDS : Liquidity Shortage or Structural Insolvency?

Giuliani, Francesco - 2013

A Credit Default Swap is typically explained as the price to insure the investor from a default of a specific issuer. In this paper we will analyze the behaviour of CDS for financial issuers from 2008 to current times.We will derive a simple theoretical framework where liability management and...

Persistent link: https://www.econbiz.de/10013091428

Bankruptcy Law as a Liquidity Provider

Ayotte, Kenneth - 2014

. This paper expands the prevailing normative theory of corporate bankruptcy — the Creditors' Bargain theory — to include a … role for bankruptcy as a provider of liquidity. The Creditors' Bargain theory argues that bankruptcy law should be limited … costs of these rules. We also connect our theory to the use of bankruptcy for financial institutions, where liquidity …

Persistent link: https://www.econbiz.de/10013064354

Financial Distress and the Value Premium

Fu, Yufen - 2014

The value premium is the empirical observation that low market/book “value” stocks have higher returns than high market/book “growth” stocks. In this paper, we report evidence that there is a value premium for firms in financial distress despite the anomalous observation that firms in...

Persistent link: https://www.econbiz.de/10013069137

Small Business Financial Distress and the 'Phoenix Syndrome' — A Re-Evaluation

Rotem, Yaad - 2013

In a typical "phoenix syndrome" scenario, a small business entrepreneur who controls the financially distressed Company A registers Company B, to which the assets of Company A are transferred in what appears to be fraudulent conveyance. Company B serves as a vehicle through which the business is...

Persistent link: https://www.econbiz.de/10013071900

Stochastic Mortality, Macroeconomic Risks, and Life Insurer Solvency

Hanewald, Katja - 2019

is modelled as a stochastic process. Our simulation results show that insolvency probabilities are significantly higher …

Persistent link: https://www.econbiz.de/10012906039

Strategic Default, Investment and the Resolution of Financial Distress

Koreli, Nika - 2018

defaults turn into bankruptcies. We propose a theory based on three pillars: first, bankruptcy is costlier than out …

Persistent link: https://www.econbiz.de/10012907919