amount of debt during recessions. I compare the performance of portfolios of large cap debt free firms to comparable … evidence presented here has clear implications for investors and portfolio managers. During market downturns, debt free firms … equity investment is allocated to debt free firms rather than leveraged firms. …

This paper compares the performance of portfolios of debt free firms to comparable portfolios of leveraged firms. The … results of the study indicate that investments in portfolios of debt free firms tend to generate higher returns than …, debt free firms will not have the additional burden of debt and may be able to recover much faster than companies that …