KARLA NATALIA VILLATORO GODOY. Three Essays on Corporate Financial Policies. (Under the direction of DR. DAVID C. MAUER) In the first chapter ("Brand Equity and Corporate Debt Structure"), we develop measures of brand equity based on firms’ portfolio of trademarks. We find that firms with higher brand equity have lower equity and asset volatility and higher cash flows. Although suggestive of greater debt capacity, we find that firms with high brand equity use less debt and shorter maturity debt. We provide evidence that the relation between brand equity and leverage is causal, using the enactment of the Federal Trademark Dilution Act in 1996, which exogenously increased the value of famous brands and significantly decreased the leverage ratio of firms with famous brands. We find that the effects of brand equity on leverage are weaker for firms with higher business risk, and stronger for firms with higher information asymmetry. In the second chapter ("Cybersecurity Awareness and Debt Contracting"), we examine whether and by which mechanisms firms’ cybersecurity awareness influences firms’ cost of debt. We construct a text-based measure of firm-specific cyberawareness that captures firms’ ex-ante readiness to deter potential cyber threats and handle successful cyberattacks, and test its effect on bank debt, public debt, and credit ratings. Consistent with self-disclosed cyber awareness contributing to reduce information asymmetries surrounding firms’ cyber risks, we find that bank loan spreads and bond spreads are decreasing in firm’s cyber awareness. We further find that greater cybersecurity awareness translates into higher credit ratings and lower covenant counts in firms’ bank loans. To strengthen identification and mitigate endogeneity concerns we instrument cyberawareness using geographic cyberawareness. We continue to find significantly negative coefficients on cyberawareness in the loan spread regressions. In cross-sectional analysis, we document a stronger effect of cybersecurity awareness on loan spread in subsamples of high default risk. Lastly increasing operating efficiency on cybersecurity awareness is consistent with creditors’ positive assessment of cyber readiness. Our evidence supports the view that cybersecurity awareness creates business value through lower cost of debt. Lastly, in the third chapter I examine the effect of liberal judge ideology as a measure of ex ante litigation risk on corporate policies. . Measuring judge ideology as the probability that a three-judge panel at the federal circuit court level is dominated by democratic presidents’ appointees, I find that firms facing higher ex ante litigation risk hold more cash and prefer a more flexible payout policy shrinking away from dividends in favor of stock repurchase programs. In addition, I document that firm stock return volatility, asset volatility and capital expenditures are decreasing in judge ideology. Interestingly, judge ideology is associated with higher marginal value of cash to shareholders. Cross-sectional tests show that the effect of judge ideology on cash holdings and marginal value of cash is stronger among financially constrained firms. Collectively, these findings suggest that ex ante litigation risk acts as an external governance mechanism through which shareholders can influence managers’ behavior.