| Tekijä: | Andrade, G. Kaplan, S. N. |
| Otsikko: | How costly is financial (not economic ) distress? Evidence from highly leveraged transactions that became distressed. |
| Lehti: | Journal of Finance
1998 : OCT, VOL. 53:5, p. 1443-1493 |
| Asiasana: | Corporate finance Financial risk Gearing Balance of payments |
| Kieli: | eng |
| Tiivistelmä: | The authors examine thirty-one highly leveraged transactions (HLTs) that become financially, not economically distressed. The net effect of the HLT and financial distress is to increase value slightly. This finding strongly suggests that, overall, the HLTs of the late 1980s ctreated value. They present quantitative and qualitative estimates of the costs of financial distress and their determinants. They estimate financial distress costs to be 10-20 % of firm value. For a subset of firms that do not experience and adverse economic shock, financial distress cost are negligible. |
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