Further Evidence on Consequences of Debt Covenant Violations
研究发现债务契约违约会引发股东和审计师的信息不对称与不确定性，表现为买卖价差、回报波动率和审计费用上升，即使贷款方施加的成本较低时也是如此。
Abstract We present new evidence on debt covenant violation ( DCV ) consequences that have not previously been examined in the literature. In particular, we show that a DCV triggers significant information asymmetry and uncertainty on the part of shareholders and auditors as reflected in higher bid–ask spreads, return volatility, and audit fees. Further, these consequences occur even when lender‐imposed costs are relatively lower, consistent with the act of default itself triggering shareholder and auditor uncertainty. The results highlight costs to the firm of having bright‐line rules in contracts, and add to an understanding of the consequences of DCV s.