Leverage change, debt overhang, and stock prices
We document a significant and negative effect of the change in a firm’s leverage ratio on its stock prices. We find that the negative effect is stronger for firms with a greater likelihood of debt overhang. Moreover, firms with an increase in leverage ratio tend to have less future investment. These...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
| Published: |
Institutional Knowledge at Singapore Management University
2009
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/3016 https://ink.library.smu.edu.sg/context/lkcsb_research/article/4015/viewcontent/SSRN_id1107878.pdf |
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| Institution: | Singapore Management University |
| Language: | English |