In this paper we challenge the view that corporate bonds are always arm's length debt. We analyze the effect of bond ratings on the stock price return to acquirers in M&A transactions, which tend to have significant effects on creditor wealth. We find acquirers abnormal returns to be higher if...

We examine the impact of mispricing on capital expenditures, R&D, acquisitions, and asset sales. By decomposing the market-to-book ratio into mispricing and growth components, we show that corporate investments are linked to mispricing through market-timing and catering, after controlling for...

We find that leverage-initiating stocks experience an increase in return comovement with existing leveraged stocks and a decrease in return comovement with existing zero-leverage stocks in the year after the leverage initiation event. In contrast, stocks that fully deleverage comove more with...

Background: When a privately owned firm or privatized government entity raises capital by selling its stocks for the first time to general public, is known as initial public offering (IPO). The underpricing phenomenon and ownership structure are important characteristics of IPO process that...

We investigate the informational content of credit default swap (CDS) spreads for future volatility of (firm) assets and equity. In the cross-section, CDS spreads are significantly more informative about future asset than equity volatility. The informational content of historical and option...

This paper analyzes the evolution of the main theories regarding the capital structure and the related impact on risk and corporate performance. The capital structure is a dynamic process that changes over time, depending on the variables that influence the overall evolution of the economy, a...

A growing body of literature in accounting and finance relies on implied cost of equity (COE) measures. Such measures are sensitive to assumptions about terminal earnings growth rates. In this paper we develop a new COE measure that is more accurate than existing measures because it incorporates...

Despite the explosive growth of cryptocurrencies, whether the underlying technology adds significant value and will thus sustain broad adoption remains unclear. Using proprietary data on firm-level blockchain records from 2015 to 2021, we conduct the first large-sample study linking blockchains...

[enter AbstUsing recent US data about 1611 IPOs spanning 11 economic sectors for 2009 to 2019, we provide a fresh look at IPO performance in the near and long terms. We provide evidence that a firm’s size and age do act as predictors for its price evolution in the future. In addition, there is...