作者：BENEISH, MD; PRESS, E
作者单位：Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University
摘要：Although costs of default underpin the debt covenant hypothesis, prior research provides limited evidence of their nature, magnitude, and impact on shareholder wealth. We show that announcements of technical default are associated with significant stock price declines. Combining post-default changes in terms of debt contracts with stock returns, we examine whether the consequences arising from renegotiation of lending agreements are priced in the market, and estimate that higher costs of borro...
