Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Defaults and bankruptcies cause a larger decline in a company’s market value than is generally realized, according to a study by three professors at Stanford University and the University of Toronto. They estimate that a default—which can range from a missed bond payment to a bankruptcy filing—reduces a company’s total market value by 21.7% on average, and cuts the value of an investment-grade company by 30%. A previous study estimated that a default costs a company around 20% of its total asset value.

Treasury and Risk

Treasury and Risk Staff Writers

More from this author

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.