This article empirically studies the pricing kernel implicit in option prices. Based on the cross-sectional fits alone, no significant difference can be detected between models with different factor dynamics. A cubic pricing kernel provides almost perfect fits in the sample. Nonlinearity in the...

This paper examines the impact of product market competition and corporate governance on the cost of debt financing and the use of bond covenants. We find that more antitakeover provisions are associated with a lower cost of debt only in competitive industries. Because they are exposed to higher...