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Full-Text Articles in Corporate Finance
Industry Peer Information And The Equity Valuation Accuracy Of Firms Emerging From Chapter 11, Bingxu Fang, Sasan Saiy
Industry Peer Information And The Equity Valuation Accuracy Of Firms Emerging From Chapter 11, Bingxu Fang, Sasan Saiy
Research Collection School Of Accountancy
Valuation plays a central role in determining Chapter 11 reorganization outcomes. However, obtaining accurate valuation estimates of reorganized firms is challenging because of limited firm-specific market-based information and the oft-conflicting incentives of claimholders. We examine the role of industry peer information in reducing misvaluations and its implications for unintended interclaimant wealth transfers and postreorganization performance. First, we find that the availability of relevant industry peer information is negatively associated with equity valuation errors for firms emerging from Chapter 11. Cross-sectional results suggest that the relation between industry peer information and valuation errors varies substantially with debtors’ information environment and case …
Accounting Quality And Debt Concentration, Ningzhong Li, Yun Lou, Clemens A. Otto, Regina Wittenberg-Moerman
Accounting Quality And Debt Concentration, Ningzhong Li, Yun Lou, Clemens A. Otto, Regina Wittenberg-Moerman
Research Collection School Of Accountancy
We examine the relation between accounting quality and debt concentration in corporate capital structures (i.e., firms’ tendency to rely predominantly on only a few types of debt). Motivated by theoretical and empirical research that supports a strong link between debt concentration and creditors’ coordination costs and the importance of accounting quality in reducing these costs, we hypothesize that firms with higher accounting quality have less concentrated debt structures. Measuring accounting quality with a comprehensive index based on the occurrence of material internal control weaknesses, accounting restatements, SEC AAERs, and firms’ reliance on small auditors, we find that higher accounting quality …