This letter demonstrates that price inflation and stock returns display differing relationships depending on the measure of inflation used. The regularity that price inflation and stock returns are negatively related in post-World War II depends on the model specification.

We examine the impact of individual stock liquidity on corporate bond yield spreads in the U.S. market. By extending the endogenous-default model to include stock liquidity in the calculation of the bond value we show that a drop in stock liquidity will increase the firm's credit risk by...

Booming markets are a time of high returns and high risk, including the risk of misrepresenting the quality of an investment. The Chinese bond market has recently been going through a boom period, and we document evidence of ratings shopping in the enterprise bond market. Our evidence shows that...

The rivals of LBO targets experience an abnormal return on equity of 1.2% in the seven day window surrounding the LBO announcement. There are three hypotheses that may explain the wealth effects: the Pure Acquisition Hypothesis, the Competition Dynamics Hypothesis, and the Private Information...

We examine the effects of leveraged buyouts (LBOs) on the industry rivals of the firms that undertake the LBO. Specifically, we are interested in determining whether or not the rivals that remain public take steps to change their governance mechanisms to emulate the firms that go private....

We investigate the current leveraged buyout market in an effort to determine if the current market is overheated. Our evidence indicates that premiums paid in recent years are lower than those paid in the previous buyout wave of the 1980s. Furthermore, after controlling for firm-specific...

Using the Algo FIRST operational risk database, this paper computes the cost of operational risk loss insurance for a sample of banks over a 1-year horizon. The estimated cost of 1-year operational risk loss insurance for an average bank is 1.24% as a percentage of firm value on December 31,...