Real risk-adjusted corporate performance and capital structure: Theory and Evidence from REITs
|Speaker:||Jamie Alcock, Cambridge University|
|Date:||Friday 5 October 2012|
|Time:||14:00 - 16:00|
|Location:||Matrix LT (Building:One)|
Firm can choose a capital structure that maximises their real risk-adjusted performance by matching their nominal liabilities with their nominal assets. In doing so, they minimise the sensitivity of their risk-adjusted returns to unexpected inflationary shocks and minimise the variance of real returns. We explore this hypothesis in a sample of US Real Estate Investment Trusts (REITs), as their regulated business model allows for a straight forward distinction between real and nominal assets and liabilities.