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Legal Solvency Tests and Financial Economics

J.B. HEATON

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 1 April 2002

382

Abstract

Legal solvency tests play a crucial role in high‐stakes financial transactions. This article presents a brief introduction to legal solvency tests that play important roles in bankruptcy and corporate law. The author then proceeds to analyze these tests from the perspective of financial economics, and argues that optimal solvency tests should be context‐dependent.

Citation

HEATON, J.B. (2002), "Legal Solvency Tests and Financial Economics", Journal of Risk Finance, Vol. 4 No. 1, pp. 57-62. https://doi.org/10.1108/eb022955

Publisher

:

MCB UP Ltd

Copyright © 2002, MCB UP Limited

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