Are Enhanced Creditor Rights in Bankruptcy Desirable to Shareholders? Evidence from the Cost of Equity Capital
Published in Journal of Banking & Finance, Volume 175, Article 107442, 2025
This paper shows that enhanced creditor rights in bankruptcy can improve shareholder value by increasing borrowing capacity, reducing the cost of equity capital, and lowering information asymmetry and firm risk.
Recommended citation: Xiaoran Ni, Jin Xu, and David Yin. (2025). "Are Enhanced Creditor Rights in Bankruptcy Desirable to Shareholders? Evidence from the Cost of Equity Capital." Journal of Banking & Finance, 175, 107442.
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