This Finance Dissertation Investigates How Credit Ratings Influence Effect Equity Returns in the UK Financial Market - New Finance Projects. Credit Ratings and Equity Returns Dissertations – Empirical evidence shows that low credit risk firms experience higher returns than high credit risk firms. This observation has bemused researchers as it contradicts one of the founding principles in finance, that investments with higher risks are able to command higher returns. This principle currently underpins asset pricing theory, as well as informing investment management and risk management practices. This event study investigates how credit rating changes on corporate debt effect equity returns (stock prices).
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