Likelihood that a Troubled Firm Will Fail
Originally published: 12/07/2016 10:55
Publication number: ELQ-86518-1
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Likelihood that a Troubled Firm Will Fail

This model quantifies the probability of failure for troubled firms.

The user must define the following inputs:
- Coupon Rate
- Maturity of bond
- Riskfree rate
- Market price of bond

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (

This Best Practice includes
1 Excel Model

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Further information

- Probability of distress (Annual)
- Probability of distress over 5 years
- Probability of distress over 10 years


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  • IMC(last updated: 26/04/2020 21:49)
  • David Chousa(last updated: 06/04/2020 22:38)
  • Byron Alfaro(last updated: 15/12/2019 06:07)
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  • Valeri Mirchev(last updated: 01/12/2019 14:32)


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