Purpose: The purpose of this paper is to survey the lease vs buy coverage in leading managerial finance textbooks and to clarify the impact of tax rates and borrowing rates. Design/methodology/approach: The survey uses “plain vanilla” lease vs buy scenarios to critique and clarify...

Researchers often form ratios of variables to measure firm characteristics, but which ratios create the most powerful tests? For example, if we use ratios of book value of equity (BE) and market value of equity (ME), or earnings (E) and price (P), does it matter which variable appears in the...

This paper develops a formal model that characterizes potential conflicts of interest between real-estate landlords and tenants. The model demonstrates a tenant's incentive to undermaintain overuse (i,e., abuse) a leased property while highlighting the moral hazard problem as a cause of the...

In this article, rationales for the widespread existence of commercial real estate leasing are examined. Given the tendency of tenants to abuse property to their own advantage, there must be powerful incentives on the other side to encourage landlords and property managers to participate in the...