Scientific article
Open access

Strategic Default, Debt Structure, and Stock Returns

ContributorsValta, Philip
Published inJournal of financial and quantitative analysis, vol. 51, no. 1, p. 1-33
Publication date2016

This paper theoretically and empirically investigates how debt structure and strategic interaction among shareholders and debt holders in the event of default affect expected stock returns. The model predicts that expected stock returns are higher for firms that face high debt renegotiation difficulties and that have a large fraction of secured or convertible debt. Using a large sample of publicly traded U.S. firms for the period 1985–2012, the paper presents new evidence on the link between debt structure and stock returns that is supportive of the model's predictions.

Citation (ISO format)
VALTA, Philip. Strategic Default, Debt Structure, and Stock Returns. In: Journal of financial and quantitative analysis, 2016, vol. 51, n° 1, p. 1–33.
Main files (1)
Article (Accepted version)
  • PID : unige:85619
ISSN of the journal0022-1090

Technical informations

Creation07/25/2016 2:55:00 PM
First validation07/25/2016 2:55:00 PM
Update time03/15/2023 12:36:01 AM
Status update03/15/2023 12:36:00 AM
Last indexation01/16/2024 9:26:07 PM
All rights reserved by Archive ouverte UNIGE and the University of GenevaunigeBlack