Leverage change, debt capacity, and stock prices
We document a significantly negative effect of the change in a firm’s leverage ratio on its stock prices. This effect cannot be explained by popular asset pricing factors or firm characteristics. We find that the negative effect is stronger for firms with limited debt capacity. Moreover, firms with...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
| Published: |
Institutional Knowledge at Singapore Management University
2008
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/1429 https://ink.library.smu.edu.sg/context/lkcsb_research/article/2428/viewcontent/SSRN_id1107878.pdf |
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| Institution: | Singapore Management University |
| Language: | English |