The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
How Costly is Financial (Not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed
Open accessAbstract
This paper studies thirty‐one highly leveraged transactions (HLTs) that become financially, not economically, distressed. The net effect of the HLT and financial distress (from pretransaction to distress resolution, market‐ or industry‐adjusted) is to increase value slightly. This finding strongly suggests that, overall, the HLTs of the late 1980s created value. We present quantitative and qualitative estimates of the (direct and indirect) costs of financial distress and their determinants. We estimate financial distress costs to be 10 to 20 percent of firm value. For a subset of firms that do not experience an adverse economic shock, financial distress costs are negligible.
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Cites
The Valuation of Cash Flow Forecasts: An Empirical Analysis
KAPLAN, S. N., & RUBACK, R. S. (1995) · The Journal of Finance · doi:10.1111/j.1540-6261.1995.tb04050.x · Cited by 512
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Cited by
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Akey, P., & Appel, I. (2017) · SSRN Electronic Journal · doi:10.2139/ssrn.3083013 · Cited by 106
Internationalization and Financial Health in the US Hotel Industry
Lee, S., Koh, Y., & Xiao, Q. (2014) · Tourism Economics · doi:10.5367/te.2013.0261 · Cited by 10
Metadata
- Authors
- Andrade, G., & Kaplan, S. N.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 1998-10
- Volume
- 53
- Issue
- 5
- Pages
- 1443-1493
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W2891651322
- Cited by
- 1,254
- References
- 1
- FWCI
- 45.97
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
