A Market-Based Study of the Cost of Default

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Cash holdings and employee welfare (2013, unknown): “19 A limitation of this construct is that it does not account for the expected default costs (Davydenko, 2012; Davydenko, Strebulaev, and Zhao, 2012).”
Dynamic Models and Structural Estimation in Corporate Finance (2012, background): “…example, Schaefer and Strebulaev (2008) estimate the average asset volatility of firms that issued bonds to be 0.23, and default costs are approximately 10–20% of the total firm value at default, according to Andrade and Kaplan (1998), or 15–30%, according to Davydenko, Strebulaev, and Zhao (2012).”
Financial Networks and Contagion (2014, background): “Recent work has estimated the cost of default to average 21.7 percent of the market value of an organization’s assets, (with substantial variation – see Davydenko, Strebulaev, and Zhao (2012)).”