Consistent with prior literature, we find that increases in target leverage have a positive impact on returns to target shareholders irrespective of the source of debt. Even so, financing with bank debt has a remarkably different impact. If a target firm’s debt is primarily sourced from banks,...

There is scant empirical evidence on how the leverage of target firms affects gains to their shareholders, although there are several widely cited economic theories offered in the literature. The limited available evidence shows that shareholders of targets with greater leverage experience...

Despite SEC and state-level resistance, and contrary to the trend pursued by other firms, many electric utilities have diversified into non-electric and unregulated businesses. Moreover, this failure to focus has been rewarded with higher firm values, again contrary to the discounts documented...

Significant increases in the level of target leverage have been previously documented, following unsuccessful takeover attempts. This increased leverage may signal managerial commitment to improved performance, suggesting that corporate performance and leverage should be positively related. If,...