search query: @author Reeve, J. M. / total: 6
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| Author: | Zavgren, C. V. Dugan, M. T. Reeve, J. M. |
| Title: | The association between probabilities of bankruptcy and market responses - A test of market anticipation |
| Journal: | Journal of Business Finance and Accounting
1988 : SPRING, VOL. 15:1, p.27-46 |
| Index terms: | BANKRUPTCY CORPORATE STRATEGY DECISION MAKING MANAGEMENT |
| Language: | eng |
| Abstract: | The association between model-derived probabilities of failure and market reactions is examined for a group of failed and non-failed firms. The objective is to determine if market expectations are consistent with model estimates of the likelihood of bankruptcy. If market expectations are consistent with model-derived probabilities, then there should be dramatic market reaction to actual states that are opposite to the model predictions. The results indicated that nonfailed firms predicted to fail exhibited dramatic positive returns in the year subsequent to the prediction. Failed firms predicted to survive had no dramatic market reaction in the year prior to failure. |
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