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Leveraged Buyouts and Financial Distress
Ayash, Brian - 2019
Do leveraged buyout transactions increase the chance of bankruptcy? While corporate finance theory predicts that such sharp changes in capital structure increase financial distress costs by raising the probability of bankruptcy for each company, previous studies seem to fail to find any...
Persistent link: https://www.econbiz.de/10012866191
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Creditor Control Rights, Capital Structure, and Legal Enforcement
Daher, Mai - 2016
I investigate how the effectiveness of the judicial system impacts corporate financing policy through the channel of covenant violations across the world. Financial covenant violations trigger creditors to use their contractual acceleration and termination rights to increase interest rates or...
Persistent link: https://www.econbiz.de/10013004920
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SMEs filing for bankruptcy in Spain : the best of luck!
Sánchez-Vidal, F. Javier; García Marí, José Horacio; … - In: Business research quarterly : BRQ 28 (2025) 1, pp. 141-163
Spanish insolvency law. This work focuses on the phase starting when companies file for bankruptcy and ending with the … completion of the common phase. We apply the agency theory to explain how insolvency administrators and court characteristics … likely to result in reorganization if they are handled by specialized courts, managed by the Big 4, and if the insolvency …
Persistent link: https://www.econbiz.de/10015372943
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Optimal Capital Structure with an Equity-for-Guarantee Swap
Yang, Zhaojun - 2019
We study an equilibrium pricing of a new invented equity-for-guarantee swap and optimal capital structure of a firm, which enters into the swap. We present closed-form corporate security prices and guarantee cost, the percentage of the firm's equity allocated by the firm/borrower to an insurer...
Persistent link: https://www.econbiz.de/10012905585
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Corporate Bankruptcy and Banking Competition : The Effect of Financial Leverage
Cathcart, Lara; Dufour, Alfonso; Rossi, Ludovico; … - 2021
We investigate the impact of banking competition on corporate credit risk. Although banking competition does not, on average, affect corporate bankruptcy rates, we find that it causes corporate bankruptcies to increase significantly for high-leverage firms. This effect lasts up to eight years...
Persistent link: https://www.econbiz.de/10013233063
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Banking reform
Jackson, Patricia; Davies, Howard; Miles, David; … - SUERF Conference on Banking Reform <2015, London>; … - 2016
On 3 December EY hosted a SUERF conference on banking reform with Sir Howard Davies, the Chairman of RBS, and Dame Colette Bowe, the Chairman of the Banking Standards Board, as the two keynote speakers. Professor David Miles (Imperial College) gave the SUERF 2015 Annual Lecture on Capital and...
Persistent link: https://www.econbiz.de/10011554963
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Risk-Taking, Financial Distress and Innovation
Sheth, Arnav - 2011
We use our numerical technique to explore the optimality of risk-taking under financial distress. In our model, cash reserves are represented by a Brownian processes that includes an innovation parameter. When this innovation parameter goes to zero, our results show that risk-taking is optimal...
Persistent link: https://www.econbiz.de/10013130723
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Business tax policy under default risk
Comincioli, Nicola; Vergalli, Sergio; Panteghini, Paolo - 2019
In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax...
Persistent link: https://www.econbiz.de/10012006573
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Business tax policy under default risk
Comincioli, Nicola; Vergalli, Sergio; Panteghini, Paolo - 2019
In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax...
Persistent link: https://www.econbiz.de/10012024508
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Book-to-Market Equity, Financial Leverage and the Cross-Section of Stock Returns
Obreja, Iulian - 2010
I propose a neoclassical production economy with costly external financing, partial investment irreversibility, and endogenous investment/financing decisions to rationalize and quantify the well-documented interaction between the book-to-market equity effect and the financial leverage effect in...
Persistent link: https://www.econbiz.de/10013137473