which, compared with the risk-adjusted cost of capital, correctly signals wealth creation. For choosing between two mutually … exclusive projects, we derive an incremental AROI and an incremental risk-adjusted cost of capital, by means of which two … unequal-risk projects can be correctly compared. Iterating the incremental procedure, we show that the AROI approach correctly …

, and investment measures. We also document similar effects for aggregate equity issuance. Consistent with theory, we find …

We propose the Virtual Bingo Blower (VBB) as a way to generate credible risk and ambiguity in computerized experiments …

Traditional finance theory suggests that riskier investments should yield higher returns. Challenging this notion …, anecdotal and empirical evidence suggests that highly-incented managers may take on excessive risk, leading to greater losses …, while other theoretical research argues that high levels of option-based compensation may actually lead to greater risk …