Market Variables and Financial Distress
Author(s): Giovanni Fernandez
Citation: Fernandez Giovanni, (2016) "Market Variables and Financial Distress," Journal of Accounting and Finance, Vol. 16, Iss. 2, pp. 177 - 198
Article Type: Research paper
Publisher: North American Business Press
Abstract:
In this paper, I investigate the predictive ability of market variables in correctly predicting and distinguishing going concern opinion firms versus going concern firms. Following Fernandez et al. (2014), which demonstrated the benefit of adding market variables into a model to predict financial distress, the best distinctive market variables are employed in this paper. The bid-ask spread plays an important role the further one gets from the event, but a more subdued role as the event approaches than that found in the literature.