DEFAULT TRIGGERS: DOES A LIQUIDITYBASED DEFAULT IMPLY OVER-INDEBTEDNESS AND VICE VERSA?

Lutz Kruschwitz ； Andreas Löffler ； Daniela Lorenz ； Andreas Scholze

《Advances in Quantitative Analysis of Finance and Accounting》 13期 (2015/12) Pp. 201-223

https://doi.org/10.6293/AQAFA.2015.13.08

並列摘要

Illiquidity and over-indebtedness are common triggers of insolvency. In a discounted cash flow (DCF) framework we examine the relationship between these two triggers to verify whether these triggers are likely to coincide or whether one drives the other. We show in our analytical investigation that over-indebtedness necessarily implies danger of illiquidity at some future date. For three specific financing policies we provide sufficient and where possible, necessary conditions for the occurrence of both triggers.

並列關鍵字

Valuation ； Discounted Cash Flow ； Insolvency ； Financing Policies ； Illiquidity ； Default Trigger ； Over-Indebtedness

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