We examine how country-level legal and institutional investor protection shapes contractual creditor protection. Using debt covenant information for foreign bonds issued in the U.S., we find that bonds of firms incorporated in countries with stronger creditor rights use fewer covenants. This...

We examine how country-level legal and institutional investor protection shapes contractual creditor protection. Using debt covenant information for foreign bonds issued in the U.S., we find that bonds of firms incorporated in countries with stronger creditor rights use fewer covenants. This...

We examine the impact of country-level political rights on the cost of debt for corporate bonds issued by firms incorporated in 39 countries. Similar to, but separate from, the relation for creditor rights, greater political rights are associated with lower yield spreads. A one standard...

We examine whether state laws impact the use of debt covenants using a sample of U.S. public bond issues from 1987 to 2004. We consider variation in state laws with respect to the minimum asset/debt ratio necessary for a payout and with respect to antitakeover statutes. We find that firms...

We examine the impact of country-level political rights on the cost of debt for corporate bonds issued by firms incorporated in 39 countries. Similar to, but separate from, the relation for creditor rights, greater political rights are associated with lower yield spreads. A one standard...

Existing research suggests that, for a given firm, stock returns and changes in bond spreads are negatively related. In this paper, we show how takeover risk influences this relation. Based on a large sample of data covering the period from 1980 to 2000, we find that high-rated firms which are...

We examine the impact of state payout restrictions on firm credit ratings and bond yields. Using publicly traded bond data for a sample of large firms, we find that firms incorporated in states with more restrictive payout statutes (e.g., New York and California), have better credit ratings and...

We construct a set of household-level background risk variables to capture the covariance structure of three nonfinancial assets and two financial assets. These risks are in general statistically significant and economically important for a household's stock market participation and stock...

This study examines whether and how earnings quality, measured as accruals quality (AQ), affects the cost of equity capital. Using two-stage cross-sectional regression tests, we find that the AQ risk factor is significantly priced, after controlling for low-priced stocks. This result is robust...

We construct a set of household‐level background risk variables to capture the covariance structure of three nonfinancial assets and two financial assets. These risks are in general statistically significant and economically important for a household's stock market participation and...