Does derivatives use reduce the cost of equity?
Ahmed, S., Judge, A., & Mahmud, S. E. (2018). Does derivatives use reduce the cost of equity?. International Review of Financial Analysis, 60, (1-16). doi:10.1016/j.irfa.2018.09.004. ISSN 1057-5219
This paper examines the impact of hedging on the cost of equity capital. Using handcollected data on derivatives use for a sample of German non-financial firms, we find that user firms have a 109 basis point lower industry-adjusted cost of equity tha... Read More