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Corporate profits are volatile and highly procyclical in the aggregate, but there is substantial heterogeneity across firms in the extent of this procyclicality: I document that firms with lower productivity or higher book-to-market have more procyclical profits. A simple static profit...
Persistent link: https://www.econbiz.de/10010554543
This paper provides an explanation for momentum and reversal in stock returns within a rational expectations framework in which investors are heterogeneous in their information and investment opportunities. We assume that informed agents privately receive advance information about company...
Persistent link: https://www.econbiz.de/10011081097
This paper develops a real options model to study the interaction between industry structure and takeover activity. In an asymmetric industry equilibrium, firms have an endogenous incentive to merge when restructuring decisions are motivated by operating and strategic benefits. The model...
Persistent link: https://www.econbiz.de/10011081143