Resumen de Equity Volatility and Corporate Bond Yields

John Y. Campbell, Glen B. Taksler

• This paper explores the effect of equity volatility on corporate bond yields. Panel data for the late 1990s show that idiosyncratic firm-level volatility can explain as much cross-sectional variation in yields as can credit ratings. This finding, together with the upward trend in idiosyncratic equity volatility documented by , helps to explain recent increases in corporate bond yields.