Many companies around the world are hit by bankruptcy at some point in the financial year. When a company is declared bankrupt, it can no longer invest in the stock market. The government declares the company insolvent. An example of such a company is Lehman Brothers, a real estate and real estate company that went bankrupt in 2008. Below is a visual aid of the event that led to the company going bankrupt. This subsequently impacted the company and consequently led to the company declaring itself bankrupt. Before we look at the effects of Lehman Brothers filing for bankruptcy, we must also consider the things that led to it. irregular by historical standards. From March 1997 to June 2006, the Sheller and Homes National Real Estate Index showed an increase in prices every month except two months out of one. This sustained price has given rise to delusion among many would-be homeowners who were hoping that prices would come down in a few months. As the table shows, the reason is not only due to the good economic situation, but also to the constant increase in property prices. First-time homeowners pay hard on their mortgages as home equity grows. Second was the accessibility of pioneering mortgage lending prospects that allowed buyers to purchase homes that failed to maintain stable loan payments, as well as the ability to consistently refinance them at higher prices. This caused the interest rate to worsen as conditions were favorable. (Ariccia et al, 2008). This attributed to increased competition among lenders. The huge amount of emissions added by a... middle of paper ......by foreigners and locals to invest in them. This will always make the company earn a good profit and will greatly avoid the effects of being insolvent, thus saving many people from unemployment. Works Cited Efraim and Jennifer Dlugoszb, 2008, “The Alchemy of CDO Credit Ratings,” Harvard University Working Paper. Dell'Ariccia, , 2008, Credit Booms and Lending Standards, Evidence from the Subprime Mortgage Market, CEPR, Discussion Paper No. DP6683. Diamond, D. and P. Dybvig, 1983, “Bank Runs, Deposit Insurance and Liquidity” , Journal of Political EconomyDemyanyk, Yuliya and Otto Van Hemert, 2008, “Understanding the Subprime MortgageCrisis”, Working Paper.Dolan k, 2008, Ultra-short-term bond funds take a hit, Moningstar.comDuffie, Darrell, 2004, Compelling Reasons for better credit rating models, Financial Times, April 16, 2004.