We report on an experiment studying how traders react to stock splits and reverse splits. In the first environment, two assets have increasing fundamental values, and one asset is subject to a 2-for-1 share split while the other is not. In the second environment, the fundamental values of both...

A start of a modern-era financial innovation on capital and financial markets is usually dated around the 1970s. Drawing on two broad assumptions that (i) capital markets are important and (ii) hybrid securities are an important part of capital markets, since hybrid issues exist and continue...

We develop a dynamic model with time variation in external equity financing costs and show that variation in these costs is important for the model to quantitatively capture the joint dynamics of firms' asset prices, real quantities, and financial flows in the U.S. economy. Growth firms and high...