The impact of financial distress on return on equity among listed companies in Vietnam

This study examines the impact of financial distress on stock returns using a sample of 139 listed companies in Vietnam over the period 2009–2024 and applying a finite mixture model. The results indicate that financial distress has a negative effect on stock returns among overvalued firms, while exerting a positive effect among undervalued firms. These findings provide important implications for investors and managers in assessing stock valuation and contribute to improving stock return performance among listed companies in Vietnam.