Shin, Hyun-Han (contributor); Stulz, René M. (contributor) - 2000 - [Elektronische Ressource]
. Since Merton (1974), modern finance
theory views equity as an option on firm value. In Merton (1974), an increase in firm … Stein (1993), among others, analyze implications of cash flow volatility on firm value.
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decrease in shareholder wealth … decrease in firm value increases leverage and therefore increases the
volatility of equity when equity is a call option on firm …