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BEGIN:VEVENT
UID:222196a1ffee5ec3b725f36b65796009
CATEGORIES:Seminars
CREATED:20200703T093944
SUMMARY:WEBINAR: Tobias Berg - Frankfurt School of Finance & Management
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p style="margin-bottom: 0.0001pt;"><strong><span style="font-size: 11pt; f
 ont-family: Calibri, sans-serif; color: black;">"Leverage and Risk-Taking"<
 /span></strong><span style="font-size: 11pt; font-family: Calibri, sans-ser
 if; color: black;"> with Florian Heider</span></p><p style="margin-bottom: 
 0.0001pt; orphans: 2; text-align: start; widows: 2; word-spacing: 0px;"><sp
 an style="font-size: 11pt; font-family: Calibri, sans-serif; color: black;"
 >Abstract:</span></p><p style="margin-bottom: 0.0001pt; text-align: justify
 ; orphans: 2; widows: 2; word-spacing: 0px;"><span style="font-size: 11pt; 
 font-family: Calibri, sans-serif; color: black;">Contrary to the prediction
  of static models, risk-taking is non-monotonic in leverage in dynamic mode
 ls. If lenders rationally anticipate risk-shifting of high-leverage firms, 
 then equity-holders bear the cost of risk-shifting via higher debt interest
  rates. The higher cost of risk-shifting makes equity holders avert risk at
  medium levels of leverage. Averting risk today preserves the option to iss
 ue safe, i.e., cheap, debt tomorrow. The same friction responsible for risk
 -taking of high-leverage firms leads medium-leverage firms to avert risk. O
 ur model is able to reconcile contradictory empirical results on the relati
 on between risk and leverage, predicts that firms with medium leverage are 
 subject to investment distortions, and helps explain the low-<span>leverage
  puzzle.</span></span></p>
DTSTAMP:20260403T190418Z
DTSTART:20201112T163000Z
DTEND:20201112T173000Z
SEQUENCE:0
TRANSP:OPAQUE
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