The rivals of LBO targets experience an abnormal return on equity of 1.2% in the seven day window surrounding the LBO announcement. There are three hypotheses that may explain the wealth effects: the Pure Acquisition Hypothesis, the Competition Dynamics Hypothesis, and the Private Information...

This paper investigates the characteristics of the operational loss data formation mechanism that takes place between the date of discovery of a new operational risk event and the final settlement date on which all losses are materialized. The first loss that characterizes the initial impact of...

The two major problems with typical structural models are the failure to attain a positive credit spread in the very short term, and overestimation of the overall level of the credit spread. We recognize the presence of option liabilities in a firm's capital structure and the effect they have on...