This paper is intended to measure Reisz's (1999) empirical implication about bond yields against data: yields demanded on corporate debt should be higher the later the uncertainty facing the firm is resolved. We conduct our study looking at new bond issues made by industrial corporations between...

This paper attempts to link the agency literature (concerned with whether debt will trigger underinvestment incentives or risk-shifting behavior) with the one dealing with temporal resolution of uncertainty. To the best of our knowledge, apart from one article by John and Ronen (1990), there is...