Publication date: December 2019
Source: Finance Research Letters, Volume 31
Author(s): Douglas O. Cook, Robert Kieschnick, Rabih Moussawi
Abstract
We show that a firm's operating lease expenses are the major driver of measures of a firm's operating leverage, operational inflexibility, and sticky costs. Moreover, we show that these expenses are an important determinant of a firm's asset volatility, and therefore has implications for the pricing of different securities.