In the wake of the prominent accounting scandals of the past several years, investors and standard setters are demanding increased corporate transparency. Nowhere is the demand for transparency more salient than with off-balance-sheet financing, of which lease accounting plays a major role. At the end of 2004, total rental commitments by U.S. firms from off balance-sheet operating leases exceeded $1 trillion. As standard setters reconsider leases as part of their broad reexamination of off-balance-sheet financing, they do so without the benefit of empirical research documenting whether capital market participants find the current leasing standard value relevant. This paper examines whether as-if capitalized operating lease liabilities and capital lease liabilities are both relevant and sufficiently reliable to be priced and explores whether equity investors value operating and capital leases differently. The results are consistent with the market viewing both operating and capital leases as economic liabilities of the firm. However, the results also indicate that capital market participants price operating and capital lease liabilities differently, consistent with the bright-line tests of the current leasing standard identifying economic differences in operating and capital leases. Thus, continuing to require lease disclosures by different lease classifications would assure that equity investors will not suffer from a loss of value relevant information in the pricing of leases.