Showing 1 - 10 of 744
investments with debt. We find that flexibility in replenishing or liquidating inventory, by providing risk shifting incentives … full benefits of additional operating flexibility, irrespective of their leverage, by entering simple debt contracts of the …
Persistent link: https://www.econbiz.de/10011862200
This research focuses on the ultimate impact of hedging effectiveness on firm performance. Successful risk management in firms should lead to a lesser occurrence of lower business outcomes than higher outcomes (e.g., positive skewness in quarterly earnings per share). We empirically estimate the...
Persistent link: https://www.econbiz.de/10012892411
We analyze the treatment and impact of idiosyncratic or firm-specific risk in regulation. Regulatory authorities regularly ignore firm-specific characteristics, such as size or asset ages, implying different risk exposure in incentive regulation. In contrast, it is common to apply only a single...
Persistent link: https://www.econbiz.de/10010234037
We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency risk. In this model, banks face taxation, flotation costs of securities, and default costs and maximize shareholder value by making their financing, liquid asset holdings, and...
Persistent link: https://www.econbiz.de/10011293576
Using a novel data set and new proxies for rollover losses and market illiquidity, this paper finds that market illiquidity affects corporate bond spreads beyond a liquidity premium through a “rollover risk channel”. This effect is economically significant during episodes of market...
Persistent link: https://www.econbiz.de/10013128430
This paper examines whether rollover risk is priced on corporate bond spreads. Using a novel data set and new proxies for rollover risk and market illiquidity, the empirical analysis developed reveals that market illiquidity affects corporate bond spreads beyond a liquidity premium through a...
Persistent link: https://www.econbiz.de/10013136794
, unobserved firm and market effects, and debt governance. The impact of CEO risk aversion is economically significant …
Persistent link: https://www.econbiz.de/10013114493
Under an incomplete market, we develop a utility-based pricing model for equity and contingent convertible bond (CCB) while the straight bond is priced by an equilibrium pricing method. We derive the semi-closed-form solutions of the utility-based prices of equity and CCB and the explicit...
Persistent link: https://www.econbiz.de/10013089387
We examine the risk-taking behavior of money market funds during the fi nancial crisis of 2007-2010. We find that: (1) money market funds experienced an unprecedented expansion in their risk-taking opportunities; (2) funds had strong incentives to take on risk because fund inflows were highly...
Persistent link: https://www.econbiz.de/10013093808
We compare default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12. We find robust evidence that the default rate on Islamic loans is less than half the default rate on...
Persistent link: https://www.econbiz.de/10013068775