The Impact of Restructuring on Enterprise Value: Evidence from Korea

This study analyzes the trends of financially distressed firms of South Korea using comprehensive data from private companies and evaluates the performance of restructuring funds and corporate support programs in enhancing enterprise value (EV). By applying Discounted Cash Flow (DCF) Monte Carlo simulation and triangular decomposition of EV, the findings reveal that both restructuring system positively impact EV enhancement. However, the growth dependency of EV improvement underscores the necessity for further efforts to strengthen profitability. The study suggests transitioning restructuring investments from growth capital to buyout capital to achieve sustainable value creation.