Risk is a vital concept to grasp when investing in a firm or project. It is also a key ingredient required to evaluate the cost of capital and perform a valuation. An organization’s capital structure, specifically the amount of leverage and debt financing employed, must be accounted for to...

Con el objetivo de definir la forma de estimar teóricamente el costo de capital enColombia, se llevó a cabo una revisión de la literatura correspondiente en las bases dedatos electrónicas de las principales universidades del país. A partir de una revisiónde las prácticas metodológicas...

The extant literature has used measurements of CEO risk-taking incentives which do not include the effects of termination provisions such as severance agreements. This paper provides a general form model that allows for the valuation and computation of CEO compensation structures including...

This study examines how the effect of uncertainty on capital investment varies between focused firms and conglomerate segments. One advantage of conglomeration is that it gives segments access to the conglomerate's internal capital market, making them less likely to be financially constrained....

This paper refines the framework proposed by Beal et al (2005) and by applying Tobin's Liquidity Preference Theory (Tobin, 1958) to describe individual attitudes toward risk, and identifies a number of SRI investor profiles based on their attitude to risk

Using a large sample of U.S. firms from 2001-2018, we examine the association between corporate integrity culture and stock price crash risk. We find that firms with high integrity culture are less likely to experience future stock price crashes. Further results show that integrity culture, as a...

We examine the impact of policy uncertainty surrounding U.S. gubernatorial elections on loan contracting outcomes. Loans made to firms headquartered in election states are more likely to include contingency-pricing provisions and financial covenants. The effect is pronounced for cash flow-based...

We examine the impact of managerial characteristics on the choice of risk-decreasing and risk-increasing/-constant strategies. Using unique data on firm-, year-, and currency-specific FX exposure before and after hedging with corresponding hedging instruments, we are able to measure how much a...

In this study, we examine the effect of social capital on stock price crash risk. We find that firms headquartered in U.S. counties with higher levels of social capital exhibit lower levels of future stock price crash risk. This finding is incremental to the effect of local religiosity. We also...

Let us suppose that presently unimagined is possible, that “the unexpected may happen” (Marshall, 1920, p. 347). Then “human decisions affecting the future, whether personal, political or economic, cannot depend on strict mathematical expectation since the basis for making such...