Journal article
A new lease on firm behavior
Journal of corporate finance (Amsterdam, Netherlands), Vol.94, 102793
09/2025
DOI: 10.1016/j.jcorpfin.2025.102793
Abstract
When firms have discretion in valuing their balance sheet debt, how do they make this valuation decision given its impact on firm value? Firms make extensive use of operating leases, but unlike other types of debt, their balance sheet value is set by the firm. Using novel information on operating leases, we examine firm behavior in valuing these leases. We find that 20% of firms report higher-than-expected rates, reflecting their cost of unsecured rather than collateralized borrowing. These firms have poor information quality, operate in competitive markets, and understate lease and debt ratios by 15%.
Details
- Title: Subtitle
- A new lease on firm behavior
- Creators
- Matteo Binfarè - University of MissouriRobert A. Connolly - University of FloridaFotis Grigoris - University of Iowa, Tippie College of Business, United States of AmericaCrocker H. Liu - Cornell University
- Resource Type
- Journal article
- Publication Details
- Journal of corporate finance (Amsterdam, Netherlands), Vol.94, 102793
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jcorpfin.2025.102793
- ISSN
- 0929-1199
- eISSN
- 1872-6313
- Language
- English
- Date published
- 09/2025
- Academic Unit
- Finance
- Record Identifier
- 9984822965102771
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