A STATE-PREFERENCE MODEL OF OPTIMAL FINANCIAL LEVERAGE

Authors

  • Alan Kraus,

  • Robert H. Litzenberger

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    • The authors are, respectively, Associate Professor of Finance, Faculty of Commerce and Business Administration, University of British Columbia, and Associate Professor of Finance, Graduate School of Business, Stanford University.

  • The research for this paper was supported in part by a grant from the Dean Witter Foundation.
  • The co-authors benefitted from the comments of Joel Demski, Nestor Gonzalez, James W. Hoag, William F. Sharpe, Richard E. Stehle, and James C. Van Horne on earlier drafts of this paper. The comments of the reviewer are also gratefully acknowledged. The co-authors are, of course, jointly and equally responsible for the content of the paper.

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