This paper examines the implications of leverage for corporate risk taking in a dynamic N-period model. In each period …, there is an identical, standard risk-shifting problem. Leverage creates two inefficiencies. First, we confirm the standard … intuition by which high leverage leads firms to take risk. Second, medium leverage leads firms to avert risk. By averting risk …

-levering procedure is around for the case of risk-free debt. The procedure for risky debt is much less clear even under very simplifying …

In this paper Modigliani and Miller's risk class including only one type of firm to date, namely a non-net investing … the Gordon and Shapiro policy, this paper is only to by regarded as a first step towards (risk class) completion of the … original Modigliani and Miller model. By doing so, the model becomes a challenger of current DCF theory …

payments subject to default risk. We use a discrete risk-neutral present value model with expected payments for risk …-neutral investors and risk-free spot rates for the valuation. The expected payments include the potentiality of default by weighting … promised payments the risk-neutral default probabilities. The required risk-neutral default probabilities are derived from …

for debt repayment and growth opportunities, thereby addressing both the downside risk and the upside potential triggered …

conversion on the risk-taking behaviour of the issuing bank. We also test for regulatory arbitrage: do banks try to maintain risk … sample selection bias, we show that CoCo bonds issuance has a strong positive e↵ect on risk-taking behaviour, particularly … amplifies the impact of CoCo bonds on risk-taking. …

The regulatory use of banks' internal models makes capital requirements more risk-sensitive but invites regulatory … arbitrage. I develop a framework to study bank regulation with strategic selection of risk models. A bank supervisor can … discourage arbitrage by auditing risk models, and implements capital ratios less risk-sensitive than in the first-best to reduce …

The study examines the relationship between systematic risk of Australian Real Estate Investment Trusts (A-REITs) and …-REITs are important determinants of systematic risk. However, property type dummy variables are not significant after adjusting … in A-REITs to make better risk return trade off decisions and A-REIT managers to evaluate their strategic decisions …