The aim of this study is to examine the relationships between profits and risks of five companies which Frasers Centerpoint Limited, Far East Orchard, CapitaLand Limited, and City Development, Buking Sembawang Estates Limited. This study was carried out using the secondary data which was...

In addition to its well-documented alignment effect, managerial ownership may also value-destroying effects by shifting risk to managers and encouraging risk-substitution; that is, managers with relatively undiversified personal portfolios tend to pass up profitable projects with high...

The “low risk anomaly” refers to the empirical pattern that apparently high-risk equities do not earn commensurately high returns. In this paper, we consider the possibility that the risk anomaly represents mispricing, not a misspecification of risk, and develop the implications for...

Risk is a vital concept to grasp when investing in a firm or project. It is also a key ingredient required to evaluate the cost of capital and perform a valuation. An organization’s capital structure, specifically the amount of leverage and debt financing employed, must be accounted for to...

This paper examines the dynamic relationship between firm leverage and risktaking. We embed the traditional agency problem of asset substitution within a multi-period model, revealing a U-shaped relationship between leverage and risktaking, evident in data from both the U.S. and Europe. Firms...

This study examines the effect of family management, ownership, and control on capital structure for 523 listed and unlisted Colombian firms between 1996 and 2006 (5,094 firm-year observations). The study finds that when families are involved in management, debt levels tend to be lower for...

This study provides evidence that firms adapt to macroeconomic, real, or financial economic uncertainty by decreasing their innovation activities. The way firms adapt is related to both internal factors such as patent types (exploratory versus exploitative patents), asset redeployability, patent...

We model a firm’s value process controlled by a manager maximizing expected utility from restricted shares and employee stock options. The manager also dynamically controls allocation of his outside wealth. We explore interactions between those controls as he partially hedges his exposure to...

This study assessed the generalizability of Bowman's paradox across 12,235 firms from 28 countries. Cross-sectional and longitudinal relationships between risk and return provided broad support for the presence of Bowman's paradox in diverse country settings (Asia, Europe, and South Africa),...

In the nineties, average firm size decreased, organisations decentralized, and workers preferences shifted from large to small firms. Our model identifies the economic forces behind this trend. Small firms with little capital at risk are subject to risk-shifting. They realize more of their...