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Costs of Financial Distress: The German Evidence

Listed author(s):
  • Carsten Reimund

    (Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig)

  • Bernhard Schwetzler

    (Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig)

  • Florian Zainhofer

    (Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig)

Registered author(s):

    In this paper we aim to verify the existence of costs of financial distress (cfd) for a sample of German CDAX firms using an ex-post approach originally due to Opler/Titman (1994). In contrast to this US-based study we do not find a significant interaction between high leverage and distress for German firms: firms in distressed industries with high ex ante leverage do not display lower sales growth than their ex-ante lower levered counterparts.

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    Article provided by Credit and Capital Markets in its journal Kredit und Kapital.

    Volume (Year): 42 (2009)
    Issue (Month): 1 ()
    Pages: 93-123

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    Handle: RePEc:kuk:journl:v:42:y:2009:i:1:p:93-123
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