Machine generated contents note: About the Authors Acknowledgments Preface Part I: The Economic and Legal Framework of Corporate Restructuring and Bankruptcy Chapter 1: Corporate Financial Distress: Introduction and Statistical Background Chapter 2: An Introduction to Leveraged Finance Chapter...

Koziol (2014) derives a simple adjusted WACC equation for firm valuation that takes default probability, possible loss of future tax savings, and the potential costs of financial distress into account. In this note we show that the derivation of the adjusted formula rests on an assumption that,...