a r t i c l e i n f o JEL classification: G32 G31 G33 C61 Keywords: Counterparty effect Market incompleteness Optimal capital structure This paper builds a static contingent-claim model that allows for examining the optimal capital structure with the joint arguments of counterparty default risk and market incompleteness. A first-passage-time model with jump default barrier is adopted to capture...

After the 2007-2008 subprime financial crisis considering bankruptcy evaluation for the banking industry becomes vital. In line of that, this study aims to analyze the bankruptcy profile of foreign versus domestic Islamic banks operating in Malaysia. This study predicted 40% and 75% bankruptcy in the subjected samples of foreign and domestic Islamic banks of Malaysia respectively. However, the ...

C urrent U.S. bankruptcy law has two separate bankruptcy procedures, known as Chapter 7 and Chapter 13. When a debtor files for bankruptcy under Chapter 7, he or she must give up all assets not legally sheltered from creditor seizure in exchange for a discharge of almost all preexisting debts. Under Chapter 13, a debtor may keep all property in exchange for a promise to pay all or some specifie...

BACKGROUND We examined the association between personal bankruptcy filing and acute myocardial infarction (AMI) rates in Canada. METHODS Between 2002 and 2009, aggregate and yearly bankruptcy and AMI rates were estimated for 1,155 forward sortation areas of Canada. Scatter plot and correlations were used to assess the association of the aggregate rates. Cross-lagged structural equation models...

An understanding of factors related to trends in the incidence of personal nonbusiness bankruptcy is important to credit managers as well as to economists. This study updates and extends to 1982 an earlier study of economic factors associated with the incidence of bankruptcy from 1950 to 1970. This study shows that the incidence of personal bankruptcy follows movements in a measure of the aggre...

Abstract In this article, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics. According to current U.S. law, firms have two options: Chapter 7 liquidation 11 reorganization. Using Compustat data, first document capital structure investment non-bankrupt, 11, firms. those data moments, then estimate parameters a general equilibrium dyn...

Proposals for regulation requiring that banks maintain some minimum level of subordinated debt have gained support recently. These proposals focus on the benefits of such regulation, specifically, that supervisors are expected to free ride on debtholders’ monitoring efforts. But there are also monitoring and other costs: there is no real free ride. This paper uses the theory of capital structur...

The U.S. personal bankruptcy system functions as a bankruptcy system for small businesses as well as consumers, because debts of noncorporate firms are personal liabilities of the firms’ owners. If the firm fails, the owner has an incentive to file for bankruptcy, since both business debts and the owner’s personal debts will be discharged. In bankruptcy, the owner must give up assets above a fi...

Nowadays, prediction of corporate bankruptcy is one of the most important issues which have received great attentions among academia and practitioners. Although several studies have been accomplished in the field of bankruptcy prediction, less attention has been devoted for proposing a systematic approach based on fuzzy neural networks.  The present study proposes fuzzy neural networks to predi...