decisions based on the firm's publicly observable and time-varying fundamental. Fear of the firm's future rollover risk … standards and credit risk …

limit debt usages in order to preserve their liquidity. In some cases, they may not even exhaust their risk-free debt …

-seeking behavior by firms. Firms with high liquidity risk are likely to use cash rather than credit lines for liquidity management … because the cost of monitored liquidity insurance increases with liquidity risk. We exploit a quasi-experiment around the … downgrade of General Motors (GM) and Ford in 2005 and find that firms that experienced an exogenous increase in liquidity risk …

We study rollover risk and collateral value in a dynamic asset pricing model with endogenous debt financing by … borrowers face rollover risk if the belief dispersion between the borrowers and the pessimistic lenders widens after interim bad … presence of the rollover risk. We also highlight the role of interim trading which, by allowing creditors to sell seized …

This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the …

Higher-beta and higher-volatility equities do not earn commensurately higher returns, a pattern known as the risk … anomaly. In this paper, we consider the possibility that the risk anomaly represents mispricing and develop its implications … for corporate leverage. The risk anomaly generates a simple tradeoff theory: At zero leverage, the overall cost of capital …