Dong, Zhiyong; Wang, Cong; Xie, Fei - In: Journal of Banking & Finance 34 (2010) 10, pp. 2518-2529
We examine whether executive stock options can induce excessive risk taking by managers in firms' security issue decisions. We find that CEOs whose wealth is more sensitive to stock return volatility due to their option holdings are more likely to choose debt over equity as a capital-raising...