The purpose of this paper is to explain why leases have a purchase option and how the exercise price of this option is determined. We follow <link rid="b6">Demski and Sappington's (1991)</link> approach by using a double moral hazard setting. One limitation of their model is that the agent has unlimited liability....

We provide evidence that the effect of the Private Securities Litigation Reform Act (the Act) of 1995 on analyst forecast properties is conditional on firm size and growth opportunities. We show that analyst coverage, frequency of forecast revisions, forecast errors and dispersion after the Act...