Using data from financial reorganization plans filed by insolvent Canadian firms, we estimate that the monthly discount rate implicit in the unsecured creditors’ decision is around 4.9%. This rate is robust to a range of assumptions about the degree of risk aversion and the market-to-book ratio of assets.
BARTHELEMY, F., FISHER, T.C.G. et MARTEL, J. (2009). What Discount Rate Should Bankruptcy Judges Use? Estimates from Canadian Reorganization Data. International Review of Law and Economics, 29(1), pp. 67-72.