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by Itzhak Ben-David
Spring 2005 issue

The firms that engage in Sale-and-Leaseback seek liquidity for two main reasons. Firms in financial distress tend to sell and leaseback general assets with high resale value, and plan to use the funds to repay debt. On the other hand, firms in growth stage tend to sell specific assets with low resale value, and plan to use the funds for further investments. The economics the dichotomy in sale-and-leaseback transactions is discussed in the paper.