Caldor, the retailing chain, filed for bankruptcy in September 1995. Shortly after the bankruptcy its stock traded

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Caldor, the retailing chain, filed for bankruptcy in September 1995. Shortly after the bankruptcy its stock traded at $5.25 per share, down from about $20 earlier in the year. How much of this drop should be attributed to bankruptcy costs—all, part, or none? Explain.

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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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