Purpose: This paper aims to investigate whether idiosyncratic volatility is a priced risk factor in the Australian stock market. Design/methodology/approach: The authors use the change in idiosyncratic volatility around acquisition announcements and the related stock price revaluation to test...

Purpose The purpose of this paper is to investigate whether higher asset risk can be associated with higher leverage and to provide a rationale for the relatively low debt ratios displayed by many firms. Design/methodology/approach A game is modeled between an informed firm and uninformed...