the firm's exposure to IST shocks and risk premia. Our calibrated model replicates: i) the predictability of returns by … returns by aggregate investment and valuation ratios; and v) a downward sloping term structure of risk premia for dividend …

We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings …

Are fluctuations in firms' profitability risk a major cause of regular business cycles? We study this question within … such a model, surprise increases of risk lead to a wait-and-see policy for investment at the firm level and a decrease in … the size of firm-level risk fluctuations. We find that time-varying firm-level risk on its own is unlikely to be a major …

of financial distress. In theory, this should ease a firm's access to credit. Using a tax-based instrumental variable …

accomplished by borrowing or lending. Payout is not cut back to finance capital investment. Risk aversion causes managers to …