Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (22)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Gilson, S. C.
Right arrow Articles by Ruback, R. S.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

Rev Fin 2000; 13:43-74
© 2000 the Society for Financial Studies

Article

Valuation of bankrupt firms

SC Gilson1, ES Hotchkiss2,z and RS Ruback1
1 Harvard Business School, USA
2 Department of Finance, Carroll School of Management, Boston College, Fulton Hall, Chestnut Hill, MA 02467-3808, USA
E-mail: hotchkis@bc.edu
z Corresponding author

Abstract

This study compares the market value of firms that reorganize in bankruptcy with estimates of value based on management's published cash flow projections. We estimate firm values using models that have been shown in other contexts to generate relatively precise estimates of value. We find that these methods generally yield unbiased estimates of value, but the dispersion of valuation errors is very wide - the sample ratio of estimated value to market value varies from less than 20% to greater than 250%. Cross-sectional analysis indicates that the variation in these errors is related to empirical proxies for claimholders' incentives to overstate or understate the firm's value.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 REV FINANC STUDHome page
E. Devos, P.-R. Kadapakkam, and S. Krishnamurthy
How Do Mergers Create Value? A Comparison of Taxes, Market Power, and Efficiency Improvements as Explanations for Synergies
Rev. Financ. Stud., March 27, 2008; (2008) hhn019v1.
[Abstract] [Full Text] [PDF]

Home page
 J Law Econ OrganHome page
P. Povel and R. Singh
Sale-Backs in Bankruptcy
J. Law Econ. Organ., October 1, 2007; 23(3): 710 - 730.
[Abstract] [Full Text] [PDF]


Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.