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This paper elaborates a new default-based cost of capital estimation for private-held firms. We test the model ability to incorporate both systematic risk and size premium. Results highlight a positive and statistically significant effect of CAPM expected return and size premiums on this novel...
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bankruptcy threat, with the explanation of risk impact on higher bankruptcy costs or the underinvestment problem. However, the … risk map. The purpose of our study is to advocate two additional dimensions that incorporate liquidity and/or debt capacity … companies face the limited ability to self-resist risk outcomes, due to high debt capacity and high liquidity constraints. We …
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We study the leverage of U.S. firms over their life cycles and the connection between firm leverage, firm growth, and aggregate shocks. We construct a new dataset that combines private and public firms’ balance sheets with firm-level data from U.S. Census Bureau’s Longitudinal Business...
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