Stock price crash risk and cost of debt

Junchao Lou, Ruihong Li, Tidong Zhang and Yiling Zhang

Finance Research Letters, 2023, vol. 58, issue PD

Abstract: This paper takes corporate bonds issued by Chinese A-share listed companies from 2011 to 2021 as a sample to study the relationship and the mechanism of the relationship between stock price crash risk and debt financing cost. It is found that an increase in the risk of stock price crash will significantly increase the credit spread and issue size of corporate bond issuance; an increase in the risk of stock price crash does not have a significant effect on the expected probability of default and Z-value.

Keywords: Stock price crash risk; Debt financing cost; Information transparency (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pd:s1544612323009698

DOI: 10.1016/j.frl.2023.104597

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