Abstract:
Since the 1980s, the fault tree theory has been known as a great development in the
industrial systems' sector. Its first goal is to estimate and model the probability and
events' combination which could potentially lead to the failure of a given system.
Later static and dynamic studies such as Dugan, Venkataraman and Gulati (1997),
Gulati end Dugan (1997) and Ngom et al. (1999), were conducted. Improvements
were also suggested by Anand and Somani .(1998),Zhu et al. (2001) and Reory and
Andrews (2003) among others. Since credit risk valuation attempts to quantify
firms' default risk, the article proposes to apply one alternative approach of fault
tree, or equivalently, a reliability study to assess firms' default risk.
