The Impacts of Advertising Assets and R&D Assets on Reducing Bankruptcy Risk

Research has shown that advertising assets and R&D (research and development) assets increase shareholder value. Although one might conclude that their impacts on bankruptcy risk are merely the inverse of their impacts on shareholder value, we argue otherwise and show that the differences hinge on the fact that shareholder value is a function of expected cash flows from all future periods, whereas bankruptcy risk is a function of expected...