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How Important Is Financial Risk?
16 references·10 citing·34 second hop
How Important Is Financial Risk? (2015)How Important Is Financial Risk?Why Do U.S. Firms Hold So Much More Cash than They Used To? (2009)Why Do U.S. Firms Hold So Muc…The Cross‐Section of Volatility and Expected Returns (2006)The Cross‐Section of Volatili…The determinants and implications of corporate cash holdings (1999)The determinants and implicat…Risk Management: Coordinating Corporate Investment and Financing Policies (1993)Risk Management: Coordinating…Conditional Heteroskedasticity in Asset Returns: A New Approach (1991)Conditional Heteroskedasticit…Managerial discretion and optimal financing policies (1990)Managerial discretion and opt…Why Does Stock Market Volatility Change Over Time? (1989)Why Does Stock Market Volatil…The Determinants of Firms' Hedging Policies (1985)The Determinants of Firms' He…Financial Ratios and the Probabilistic Prediction of Bankruptcy (1980)Financial Ratios and the Prob…Determinants of corporate borrowing (1977)Determinants of corporate bor…Theory of the firm: Managerial behavior, agency costs and ownership structure (1976)Theory of the firm: Manageria…ON THE PRICING OF CORPORATE DEBT: THE RISK STRUCTURE OF INTEREST RATES* (1974)ON THE PRICING OF CORPORATE D…The Pricing of Options and Corporate Liabilities (1973)The Pricing of Options and Co…Risk, Return, and Equilibrium: Empirical Tests (1973)Risk, Return, and Equilibrium…FINANCIAL RATIOS, DISCRIMINANT ANALYSIS AND THE PREDICTION OF CORPORATE BANKRUPTCY (1968)FINANCIAL RATIOS, DISCRIMINAN…CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK* (1964)CAPITAL ASSET PRICES: A THEOR…Sell-side analysts’ assessment of ESG risk (2024)Sell-side analysts’ assessmen…The COVID-19 Impact on Corporate Leverage and Financial Fragility (2021)The COVID-19 Impact on Corpor…The correlation between green finance and carbon emissions based on improved neural network (2021)The correlation between green…Parametric Conditions of High Financial Risk in the SME Sector (2019)Parametric Conditions of High…The effects of financial distress: Evidence from US GDP growth (2018)The effects of financial dist…Stock return volatility and capital structure measures of nonfinancial firms in a dynamic panel model: Evidence from P akistan (2018)Stock return volatility and c…Dividend Behaviour of Indian-listed Manufacturing and Service Sector Firms (2018)Dividend Behaviour of Indian-…In good times and in bad: Defined-benefit pensions and corporate financial policy (2017)In good times and in bad: Def…Customer-base concentration and the transmission of idiosyncratic volatility along the vertical chain (2016)Customer-base concentration a…Does the information content of payout initiations and omissions influence firm risks? (2014)Does the information content …Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation (1982)Generalized autoregressive conditional heteroskedasticity (1986)ARCH modeling in finance (1992)On the Relation between the Expected Value and the Volatility of the Nominal Excess Return on Stocks (1993)Risks for the Long Run: A Potential Resolution of Asset Pricing Puzzles (2000)The Cost of Capital, Corporation Finance and the Theory of Investment (1958)Dividend Policy, Growth, and the Valuation of Shares (1961)Corporate financing and investment decisions when firms have information that investors do not have (1984)The Capital Structure Puzzle (1984)A Survey of Corporate Governance (1997)Financial Ratios As Predictors of Failure (1966)Conditional logit analysis of qualitative choice behavior (1972)Methodological Issues Related to the Estimation of Financial Distress Prediction Models (1984)The Effect of Audit Quality on Earnings Management* (1998)Forecasting Bankruptcy More Accurately: A Simple Hazard Model (2001)A Closed-Form Solution for Options with Stochastic Volatility with Applications to Bond and Currency Options (1993)Theory of rational option pricing (2005)The Behavior of Stock-Market Prices (1965)THE VALUATION OF RISK ASSETS AND THE SELECTION OF RISKY INVESTMENTS IN STOCK PORTFOLIOS AND CAPITAL BUDGETS**This paper is another in a series of interrelated theoretical and statistical studies of corporate financial and investment policies being made under grants from the Rockefeller Foundation, and more recently the Ford Foundation, to the Harvard Business School. The generous support for this work is most gratefully acknowledged. The author is also much indebted to his colleagues Professors Bishop, Christenson, Kahr, Raiffa, and (especially) Schlaifer, for extensive discussion and commentary on an earlier draft of this paper; but responsibility for any errors or imperfections remains strictly his own.[Professor Sharpe's paper, “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk” (Journal of Finance, September 1964) appeared after this paper was in final form and on its way to the printers. My first section, which parallels the first half of his paper (with corresponding conclusions), sets the algebraic framework for sections II, III and VI, (which have no counterpart in his paper) and for section IV on the equilibrium prices of risk assets, concerning which our results differ significantly for reasons which will be explored elsewhere. Sharpe does not take up the capital budgeting problem developed in section V below.] (1975)The Cross-Section of Expected Stock Returns (1992)EFFICIENT CAPITAL MARKETS: A REVIEW OF THEORY AND EMPIRICAL WORK* (1970)Option pricing when underlying stock returns are discontinuous (1976)The valuation of options for alternative stochastic processes (1976)An equilibrium characterization of the term structure (1977)Editor's Choice Digesting Anomalies: An Investment ApproachCommon risk factors in the returns on stocks and bonds (1993)On Persistence in Mutual Fund Performance (1997)Liquidity and leverage (2008)… and the Cross-Section of Expected Returns (2015)The Nature of the Firm (1937)Separation of Ownership and Control (1983)Law and Finance (1998)Managerial incentives and risk-taking☆ (2005)How does financial reporting quality relate to investment efficiency? (2009)
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References

  • 1976Theory of the firm: Managerial behavior, agency costs and ownership structure71,441 cited
  • 1973The Pricing of Options and Corporate Liabilities29,064 cited
  • 1964CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK*19,431 cited
  • 1968FINANCIAL RATIOS, DISCRIMINANT ANALYSIS AND THE PREDICTION OF CORPORATE BANKRUPTCY14,869 cited
  • 1973Risk, Return, and Equilibrium: Empirical Tests14,248 cited
  • 1977Determinants of corporate borrowing13,160 cited
  • 1974ON THE PRICING OF CORPORATE DEBT: THE RISK STRUCTURE OF INTEREST RATES*10,779 cited
  • 1991Conditional Heteroskedasticity in Asset Returns: A New Approach10,268 cited
  • 1980Financial Ratios and the Probabilistic Prediction of Bankruptcy6,005 cited
  • 2006The Cross‐Section of Volatility and Expected Returns4,576 cited
  • 1999The determinants and implications of corporate cash holdings3,910 cited
  • 1990Managerial discretion and optimal financing policies3,679 cited
  • 1989Why Does Stock Market Volatility Change Over Time?3,433 cited
  • 1985The Determinants of Firms' Hedging Policies3,270 cited
  • 1993Risk Management: Coordinating Corporate Investment and Financing Policies

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2,897 cited
  • 2009Why Do U.S. Firms Hold So Much More Cash than They Used To?2,896 cited
  • Cited by

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    • 2017In good times and in bad: Defined-benefit pensions and corporate financial policy49 cited
    • 2024Sell-side analysts’ assessment of ESG risk42 cited
    • 2016Customer-base concentration and the transmission of idiosyncratic volatility along the vertical chain38 cited
    • 2019Parametric Conditions of High Financial Risk in the SME Sector30 cited
    • 2018Stock return volatility and capital structure measures of nonfinancial firms in a dynamic panel model: Evidence from P akistan28 cited
    • 2021The COVID-19 Impact on Corporate Leverage and Financial Fragility22 cited
    • 2014Does the information content of payout initiations and omissions influence firm risks?21 cited
    • 2018Dividend Behaviour of Indian-listed Manufacturing and Service Sector Firms18 cited