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Abstract–Some Evidence on Unexpected Empirical Relationships between Operating Risk and Financial Leverage

Published online by Cambridge University Press:  19 October 2009

Dwight Grant
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Extract

The research report abstracted here addresses the question: do firms of low risk before financial leverage introduce relatively more financial leverage than firms of relatively high risk before leverage? Most of the received theory of corporation finance suggests an affirmative response. Our empirical work encourages us to be far more cautious.

Type
Corporation Finance
Information
Journal of Financial and Quantitative Analysis , Volume 9 , Issue 5 , November 1974 , pp. 765
Copyright
Copyright © School of Business Administration, University of Washington 1974

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