Face value

Abstract: We present a model of a financially distressed firm with outstanding bank debt and public debt. Coordination problems among public debtholders introduce investment inefficiencies in the workout process. In most cases, these inefficiencies are not mitigated by the ability of firms to buy back their public debt with cash and other securities—the only feasible way that firms can restructure their public debt. We show that Chapter 11 reorganization law increases investment, and we characterize the types of corporate financial structures for which this increased investment enhances efficiency. DURING THE LATE 1980S there was a dramatic increase in the leverage of U.S. corporations, raising concerns about the corporate sector's financial stability.^ Indeed, by June 1990, 156 (24%) of the 662 companies that issued high-yield bonds between 1977 and 1988 had either defaulted, gone bankrupt, or restructured their public debt. The face value of these distressed bonds amounts to nearly 21 billion dollars.^ The central question raised by these distressed firms is easy to put but hard to answer: What is the effect of financial distress on a firm's operating performance? There are two competing views. The first, an application of the

Abstract: A computerized merchandising system useable by a corporation associated with a group of stores selling goods, the system acting not only to induce a consumer to purchase these goods, but also to induce this consumer to buy shares of stock issued by the corporation, for either choice is to his possible advantage. On the site of each store is a satellite computer which prints out and supplies a certificate to a buyer who pays its face value. The certificate is redeemable within a specified period, and when redeemed then entitles the buyer either to acquire from any one of the stores, goods whose total sales price is equal to the face value of the certificate, or to acquire shares of stock in the corporation whose market value at the time the certificate was purchased was then equal to its face value. If therefore the market value of the shares at the time of redemption has appreciated above the face value of the certificate, the buyer stands to gain by acquiring the shares. But the buyer cannot suffer a loss, for he has the option of acquiring the goods in lieu of the stock.

Abstract: ringgits p 1 U.S. dollar). Four studies demonstrate the robustness of the face value dinar p 1 effect across different currencies, exchange rate frames, and with samples from two countries, and two studies show that ability-related factors such as time pressure and experience moderate the face value effect. The article concludes by discussing the theoretical implications of the findings.

Abstract: According to national accounts data, value added per worker is much higher in the non-agricultural sector than in agriculture in the typical country, and particularly so in developing countries. Taken at face value, this "agricultural productivity gap" suggests that labor is greatly misallocated across sectors. In this paper, we draw on new micro evidence to ask to what extent the gap is still present when better measures of sector labor inputs and value added are taken into consideration. We find that even after considering sector differences in hours worked and human capital per worker, as well as alternative measures of sector output constructed from household survey data, a puzzlingly large gap remains.