This research is aimed at analyzing the causality puzzle on the correlation between financial leverage and systematic risk (beta). Financial leverage and beta are usually considered as two proxies of risk derived from different domains: one ends at financial decision outcome, and the other...

This research is aimed at analyzing the causality puzzle on the correlation between financial leverage and systematic risk (beta). Financial leverage and beta are usually considered as two proxies of risk derived from different domains: one ends at financial decision outcome, and the other...

Differential Privacy offers the online advertising industry new means to increase consumer privacy by obfuscating consumer data. While achieving the same privacy, these means decrease targeting accuracy differently, subsequently reducing advertisers’ willingness to pay (WTP) for targeted...

We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing...

When larger market values of equity result in being subject to costly regulation, firms have incentives to shift their sources of financing toward debt and away from equity. We use the Sarbanes-Oxley Act of 2002 (SOX) as a setting to provide evidence of such incentives. Smaller firms were...

This study examines how a set of Canadian and German firms apply the quantitative capital disclosure requirements contained in IAS 1. We find significant inter-country differences in both the propensity to disclose a capital structure and in the form of the disclosure. Further, we find variation...

When larger market values of equity result in being subject to costly regulation, firms have incentives to shift their sources of financing toward debt and away from equity. We use the Sarbanes-Oxley Act of 2002 (SOX) as a setting to provide evidence of such incentives. Smaller firms were...

We investigate the determinants of the capital structure of Brazilian companies between 2000 and 2009. We use a quantile regression model and compare its results with the ones provided by conventional models (least squares and fixed effects). We show that the effects of the capital structure...

This paper presents a dynamic model of the firm with risk-free debt contracts, investment irreversibility, and debt restructuring costs. The model fits several stylized facts of corporate finance and asset pricing: First, book leverage is constant across different book-to-market portfolios,...