. In particular, we can numerically support the usual simplification in the absence of default risk. In case that firms are … default-risky, however, empirical findings indicate a clear difference between these costs equal to 1.88 percentage points on … average even for moderate assumed bankruptcy costs which translates to a company mispricing of nearly 100%. As a result, the …

reorganization or liquidation if the value of the firm falls below a certain threshold. In the event of default, however, many … bankruptcy codes stipulate an automatic stay of assets that prevent bondholders from triggering liquidation and thus impact many …

asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal … model predicts the negative impact of inflation on real equity values is stronger for low leverage firms. We find empirical …

This paper provides evidence that firm value declines when credit default swaps (CDS) are initiated, and that the …

quantitative model where firms make investment, financing, and default decisions subject to aggregate and idiosyncratic risk. Firms … profit opportunities and increases default risk for debtholders. Equityholders are protected against default risk due to the …

default), suggest the existence of time-varying liquidity risk of corporate bond returns conditional on episodes of flight to …

asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal … model predicts the negative impact of inflation on real equity values is stronger for low leverage firms. We find empirical …