Feb 2Do 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 2What 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 14Do 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...