Beta, as measured by the Capital Asset Pricing Model (CAPM), is widely used for pricing stocks, determining the cost of capital, and gauging the extent to which markets are integrated. The CAPM model assumes that equilibrium conditions prevail. The choice of which market portfolio to use in the...

The bankruptcy of Revco Drug Stores is one of the most notable in the history of highly leveraged transactions. This study considers the allegation that the leveraged buyout of Revco left it without adequate capital to survive. We use Monte Carlo simulation to determine Revco's financial...

The story of the panic and crash of 1907 suggests that major financial crises can be the result of a convergence of certain market forces-forces of the market's "perfect storm," if you will-that cause investors and depositors to react with alarm. The storm begins with a highly complex financial...