Real risk-adjusted corporate performance and capital structure: Theory and Evidence from REITs

Finance

Speaker:Jamie Alcock, Cambridge University
Date: Friday 5 October 2012
Time: 14:00 - 16:00
Location: Matrix LT (Building:One)

Further details

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.