Six variables that predict defaults
We discuss which variables can help us predict corporate defaults The current pandemic is triggering a stark growth in corporate...
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Thought Leadership
OUR VALUE COMES FROM AN ANALYTICAL UNDERSTANDING OF THE FORCES AT WORK IN FINANCIAL MARKETS
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Mar 1
Is it worth investing in distressed stocks?
We investigate whether investing in stocks that are close to default generates a premium Hundreds of firms are going bust these days....
Feb 2
Do firms with higher leverage deliver higher returns?
We review a classic question on the relation between financial risk and equity returns, and discover that the evidence defies the theory...
Feb 2
What is the relation between asset risk and leverage?
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...
Jan 14
Do firms have target leverage ratios?
We examine whether firms pursue an optimum leverage ratio, what factors affect optimum leverage, and how fast firms converge towards the...
Jan 14
Fishing for Alpha and catching Beta
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...
Jan 14
Do financially constrained firms generate higher returns?
We examine the effect of financing constraints on corporate investment, risk and equity returns In corporate finance, financing...
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