Thought Leadership

We discuss which variables can help us predict corporate defaults The current pandemic is triggering a stark growth in corporate...

We summarise all the findings of our articles on distress risk First, financial distress can be predicted by looking at a relatively...

We discuss the role of retail investors investing in distressed stocks We have done a series of posts on the returns of distress stocks....

We investigate whether investing in stocks that are close to default generates a premium Hundreds of firms are going bust these days....

We discuss the optimal timing of a strategy that invests in firms that are close to bankruptcy In a previous post, we provided evidence...

We investigate whether distressed stocks carry a premium after controlling for the exposure of the portfolio to common factors, such as...

We investigate the existence of a distress premium, controlling for common factors such as market beta, size and value, around the world....

Is there a distress risk factor? And how much of this factor is explained by other risk factors? In previous posts, we have discussed the...

We investigate whether the systematic component of distress risk carries a premium Asset pricing theory states that those who bear...

We discuss the relative importance of cash flow news versus discount rate news, in explaining the volatility of aggregate stock returns...

We discuss the predictability of aggregate stock market returns using currently observed dividend-price ratios Return predictability is...

Are distressed stocks more likely to generate returns above 100%? We have done a series of posts on the returns of distress stocks. We...

We review a classic question on the relation between financial risk and equity returns, and discover that the evidence defies the theory...

We discuss how financial risk and asset risk are co-determined, and how this is reflected in the beta of assets and in the beta of equity...

We examine whether firms pursue an optimum leverage ratio, what factors affect optimum leverage, and how fast firms converge towards the...

We examine the implications of rewarding portfolio managers on the basis of Alpha, and how this can lead to an increase in the Beta of...

We examine the effect of financing constraints on corporate investment, risk and equity returns In corporate finance, financing...