My dissertation aims to explain a number of empirical findings about valuation and performance of diversified firms using the model of optimal diversification. It contains two chapters. The first chapter of the dissertation proposes a model of optimally diversified firm and shows that the main...

We study trading and prices in newly issued municipal bonds. Municipals, which trade in decentralized, broker-dealer markets, are underpriced when issued, but unlike equities the average price rises slowly over a period of several days. We document high levels of price dispersion in newly issued...