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March 1, 2008

Toni Whited Again Earns Distinguished Prize for Research on Corporate Finance

Toni M. Whited, Kuechenmeister-Bascom Professor in Business at the University of Wisconsin-Madison School of Business, co-authored one of two papers on corporate finance to be honored with a prestigious Brattle Prize in Corporate Finance.

Whited and Christopher A. Hennessy of the University of California-Berkeley took second place and were awarded $5,000 for their paper, "How Costly Is External Financing? Evidence from a Structural Estimation."

The prize was based on the best articles published in 2007 in the Journal of Finance, which is published by the American Finance Association. This is the second time Whited and Hennessy were honored. The pair took first place in the Brattle Prize in 2005 for another paper, “Debt Dynamics.”

In their most recent paper, they infer the cost of financing corporations, which constitutes not only fees companies pay to take out loans or to issue equity but also indirect costs that come from the effect of these fees on company decisions. Whited said the results of the latest paper show that "these indirect costs are substantial, especially for small firms.”

This year’s award was presented in February at the annual meeting of the American Finance Association.

"Outstanding research is published in the Journal of Finance,” said Wisconsin School of Business Dean Michael M. Knetter. "To be recognized twice for having the best paper in a leading journal is a great reflection on the quality of work Toni is doing and also a great reflection on the school and our priorities.”

Whited, who joined the business school in 2003, is known for her research in corporate diversification, liquidity constraints and measurement error. She earned her doctoral and master's degrees, both in economics, from Princeton University. Prior to earning her Ph.D., she was an economist for the Board of Governors of the Federal Reserve System.