Danis, András; Rettl, Daniel A.; Whited, Toni M. - In: Journal of Financial Economics 114 (2014) 3, pp. 424-443
We revisit the well-established puzzle that leverage is negatively correlated with measures of profitability. In contrast, we find that at times when firms are at or close to their optimal level of leverage, the cross-sectional correlation between profitability and leverage is positive. At other...
