Costs associated with companies who cannot meet its financial obligations. Financially distressed companies incur more costs as their cost of borrowing is higher, their production is lesser and they have higher opportunity costs in terms of lost income. Also included are reorganization or liquidation costs.
Related information about financial distress costs:
- Financial Distress Costs - Financial Dictionary - The Free Dictionary
Legal and administrative costs of liquidation or reorganization. Also includes implied costs associated with impaired ability to do business (indirect costs).
- Financial Distress Costs - wikiCFO
Nov 11, 2009 ... See Also: Financial Accounting Standards Board · Financial Instruments · Financial Ratios · Finance Beta Definition · Hedging Risk Financial ...
- The Risk-Adjusted Cost of Financial Distress - Journal of Finance
perform a risk-adjusted valuation of financial distress costs. Consider ... years, then we can express the present value of financial distress costs as. Φ =qφ + (1 ...
- The Risk-Adjusted Cost of Financial Distress - NYU Stern School of ...
genuine financial distress costs, but rather consequences of the economic shocks that drove firms ... the net present value (NPV) of financial distress costs.
- Estimating Risk-Adjusted Costs of Financial Distress
in which financial distress costs that would be estimated at roughly 1.6% of firm value ... expected financial distress costs—one that is premised on answering an ...
- What is financial distress costs? definition and meaning
Definition of financial distress costs: Costs associated with companies who cannot meet its financial obligations. Financially distressed companies incur more ...
- Berk Chapter 16: Financial Distress
Oct 29, 2011 ... Calculate the value of the firm, including financial distress costs and agency costs . Explain the impact of asymmetric information on the optimal ...
- "An investigation of expected financial distress costs" by Yuval Dan ...
This paper finds evidence supporting the existence of significant expected financial distress costs. Expected financial distress costs are estimated for a large ...