We consider a regulated bank with access to bond and insured deposit financing. Bank manager-owners have specific abilities, which allows them to extract rents. We show that deposit finance acts as a commitment device, that has the potential to raise the overall debt capacity of the bank and...

In this article, we consider the impact of asymmetric information between managers and investors on the optimal capital structure decision. This is done within a continuous-time framework, where the relevant state variable is given by the EBIT value of the firm; an approach taken by Goldstein et...

This paper analyzes empirically the relation between financial analysts' recommendation profitability and their forecast accuracy and shows that contrary to intuition the group of most successful recommendations is not associated with the highest accuracy on average. The finding that best...

This paper argues that the relation between financial analysts' earnings forecast accuracy and their recommendation profitability has to be augmented by the extent of commonality in their forecast errors. We show that while accuracy is positively related to expected performance, the correlation...

We disentangle the relevance of risk factors versus stock characteristics in the cross-section of expected returns not only by analyzing covariance patterns in returns, but also by starting from economic first principles of price formation, i.e. by employing the information content of...