Purpose – The purpose of this paper is to find out whether investors tend to reward firms that resist the urge to borrow and operated with debt free balance sheet and penalize firms that have high levels of debt. Design/methodology/approach – The performance of portfolios of debt free firms...

Purpose – The purpose of this paper is to find out whether investors tend to reward firms that resist the urge to borrow and operated with debt free balance sheet and penalize firms that have high levels of debt. Design/methodology/approach – The performance of portfolios of debt free firms...