Estimates of Creditors’ Discount Rates in Court-Supervised Reorganization Decisions
نویسندگان
چکیده
Using data from reorganization proposals filed by bankrupt Canadian firms, we estimate the discount rate implicit in the creditors’ reorganization decision. Using two approaches, a grid-search and an optimization algorithm, we estimate the implicit monthly discount rate in reorganization to be around 5 percent, which corresponds to an annual discount rate of 87 percent.
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