This study develops a currency option pricing model under stochastic interest rates when interest rate parity holds, and it is assumed that domestic and foreign bond prices have local variances that depend only on time. We demonstrate how existing currency option models are simply derived from...

We provide a tradeoff model of the capital structure that allows leverage to be a function of a firm’s choice of tax aggressiveness. The model’s testable implications are supported empirically. Debt use is inversely related to corporate tax aggression for most firms, and the relation is...

BRICS nations have recently witnessed substantial increases in core import commodity prices that portend the possibility of significant, non-transitory inflation and all that would occasion. This paper suggests a lower-cost alternative for hedging import commodity prices. The hedging instrument...