chapter6leveragedecisionsppt31英文-电子商务(编辑修改稿)

chapter6leveragedecisionsppt31英文-电子商务(编辑修改稿)内容摘要：

s? • What are the cost of financial distress? • What is implication for future research? 下载 Characteristics of leverage on value of firm • Convex • At lower levels of leverage, increase at a fairly slow rate • At higher levels of leverage, increase at an accelerating rate to extremes 下载 Circumstances leading to Financial Distress • First stage: negative cash flow and earnings, and a falling market equity value • Second stage: costs reduction, including layoffs and plant closing • Third stage: late payment to suppliers, employees, creditors and other more drastic actions. • Forth stage: Bankruptcy 下载 Financial Distress Costs • Loss of petitiveness in a product or service market. • Concessions to stakeholders to pensate them for the risk of doing business with a distressed firm. • Loss of the value of interest tax shield. • Bankruptcy costs 下载 Implications • Expected financial distress costs is the multiply of probability of financial distress and cost of actually financial distress. • Effect of EFDC on a firm’s value ( ) [ Pr ( ) ]E C F F D o b F F D C F F D()[ ( ) ]( 1 )[ ( ) ]Tc fdL U d e b tE CF F DP V E CF F DrV V D P V E CF F D  下载 Empirical Evidences • Time series tests require。