Before revision:  At the same time expected returns on the stock must remain high to compensate risk averse agents to hold a larger share  .
After revision:  At the same time expected returns on the stock must remain high to compensate risk averse agents to hold a larger share and leverage is mechanically low as agents are limited in their borrowing. Finally, empirical results are given, documenting a novel stylized fact which is predicted by the model, namely that the leverage cycle is both pro- and counter-cyclical .