Further Evidence on

: Evidence from

Working Paper Series

A Critical Examination of Corporate Investment Efficiency: Evidence From U.S. Firms

We document a broad decline in return on assets ( ROA ) among U.S. public firms from 1963 to 2020, including firms with high growth opportunities, R&D intensity and market power. Many firms earn realized returns below estimated costs of capital and valuation‐implied benchmarks. Declining asset utilization and Ric...

WORKING PAPER

Equity Tricks and Growth Treats: The Implied Cost of Capital and M&A

This study examines how the implied cost of capital(ICC) effects a firm's financing and investment decisions. We find that firms with lower ICC rely more on equity financing and undertake larger mergers and acquisitions. These findings indicate that ICC captures both equity mispricing and a firm's ability to generate v...

Debt-equity choice as a signal of profit profile over time