unemployment risk. We exploit changes in state unemployment insurance laws as a source of variation in the costs borne by workers …-intensive and financially constrained firms. We estimate the ex ante, indirect costs of financial distress due to unemployment risk …

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 corporate capital structure. The risk anomaly generates a simple tradeoff …

far as US corporations are concerned. In contrast to traditional corporate finance theory, our model indicates that the … globally with business risk. We highlight that a CoCo with a full principal write-down feature would cause serious …

This paper describes an equilibrium macro finance model where contracts are the mechanism by which differentially risk …-investment decisions generating operating income and operating risk) and (financial decisions generating financial risk); and 2 no … constrained managers of the representative firm make production-investment decisions that conform to the risk aversion of …

This paper describes a parsimonious macro-finance model where contracts are the mechanism by which differentially risk … in risk aversion or perception of risk changes the market valuations of their securities and has the representative firm … adjustment is designed to offset any risk shifting effects on the market valuation of bonds. The model set-up includes 2 …

model separate into bondholders and stockholders based on differences in risk aversion that creates a conflict of interest … (investment decisions generating operating income and risk, and financing decisions generating financial risk); and 2 no … set-up it is optimal for the contract constrained manager to make investment decisions that conform to the risk aversion …

and financing decisions characterize business cycles. The conflict of interest problem between the differentially risk … conforming to the risk aversion of stockholders (as reflected in stock valuations), and then make financing decisions to offset … any risk shifting between bondholders and stockholders resulting from the production/investment decision. In this way the …