Two Essays On Corporate Finance And Risk Management
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Two Essays On Corporate Finance And Risk Management
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Author : Yanfeng Li
language : en
Publisher:
Release Date : 2021
Two Essays On Corporate Finance And Risk Management written by Yanfeng Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
Two Essays On Corporate Finance
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Author : Kristine W. Hankins
language : en
Publisher:
Release Date : 2006
Two Essays On Corporate Finance written by Kristine W. Hankins and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
ABSTRACT: Firms have many risk management tools at their disposal. How a firm uses these choices alone and as part of a choice set is less well understood. I examine two major risk management decisions in the corporate finance arena. First, I address the use of operational hedging (corporate finance activity that reduces firm risk). I document that acquisitions are operational hedges and that firms substitute operational and financial hedging. Next, I explore the speed of capital structure adjustment. Capital structure decisions are an important part of risk management and I document that the costs and benefits of adjustment are significant factors in determining leverage. Collectively, my research presents new information on how firms use two major risk management tools: operational hedges and capital structure adjustment.
Two Essays On Corporate Finance
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Author : Sen Li
language : en
Publisher:
Release Date : 2004
Two Essays On Corporate Finance written by Sen Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
Essays On Corporate Finance And Risk Management
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Author : Monica Marin
language : en
Publisher:
Release Date : 2008
Essays On Corporate Finance And Risk Management written by Monica Marin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Bankruptcy categories.
Three Essays On Risk Management And Corporate Finance
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Author : Tianjiao Gao
language : en
Publisher:
Release Date : 2014
Three Essays On Risk Management And Corporate Finance written by Tianjiao Gao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Two Essays In Corporate Finance
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Author : Natasha A. Burns
language : en
Publisher:
Release Date : 2003
Two Essays In Corporate Finance written by Natasha A. Burns and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Financial statements categories.
Abstract: This dissertation analyzes restatements of financial statements and the use of cross-listed stock by foreign firms in acquisitions of U.S. firms. The first essay examines the components of the CEO's compensation: stock options, equity holdings, restricted stock and long-term incentive plans (LTIP) and their relation to misreporting. A unique feature of options is that it allows executives to benefit if the stock price increases, while mitigating their loss if the stock price decreases. This essay shows that incentives from option compensation are positively associated with misreporting. An increase in the equity and restricted stock component of compensation has no impact on incentives to engage in such risky accounting. The use of long-term incentive plans and restricted stock do not extend a manager2s horizon relative to the short-term focus induced by options. Finally, we examine the market reaction to the announcement of a restatement. It is more negative for those restating firms in which the exercise of options was greater during the misreported period, providing support for the idea that options provide a 1camouflage2 for insider trading. The second essay examines the role of cross-listed stock in foreign acquisitions of U.S. firms. By cross-listing, a foreign firm reduces its cost of an acquisition made with equity by enhancing the rights of its minority investors and by decreasing barriers to ownership of its shares by U.S. investors. Cross-listed firms using equity to finance an acquisition pay less than non cross-listed firms paying with cash. Despite this benefit, cross-listed firms use equity less often than U.S. firms. Cross-listed firms from countries with poorer investor protection use equity less often than those from countries with greater investor protection. Moreover, they pay a higher premium when using equity. We find evidence supporting Hansen's (1987) risk-sharing hypothesis that using equity in an acquisition enables the bidder to share the risk with the target that the bidder overpaid, as the target is forced to share in any post acquisition revaluation effects. Finally, we find that while non-cross-listed firms use favorable exchange rate movements to bid more aggressively, cross-listed firms do not.
Essays In Corporate Finance
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Author : Steven Irlbeck
language : en
Publisher:
Release Date : 2020
Essays In Corporate Finance written by Steven Irlbeck and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Corporations categories.
In Chapter 2 titled "Religiosity and Risk Taking: Corporate Culture or Demand Driven?'', we consider two mechanisms which may explain why religiosity impacts corporate risk taking. We jointly examining the religious affiliation of employees as well as the religious affiliation of consumers. Our evidence suggests that firms' reduction in risk taking is both corporate culture and demand driven.
Two Essays In Corporate Finance
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Author : Gauri W. Karve
language : en
Publisher:
Release Date : 2010
Two Essays In Corporate Finance written by Gauri W. Karve and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
This thesis presents two essays that link firm behavior to constraints they face while raising capital in external markets. The first. essay features a theoretical model that establishes the importance of speculative motive and firm borrowing capacity, as reflected by asset tangibility, on cash management decisions of financially-constrained firms. The study concludes that for constrained firms, cash varies positively with asset intangibility and likelihood of future profitable investment, and negatively with future cash flows; while these relationships are imperceptible for unconstrained firms. The model further introduces a risk-averse firm owner and proves that ceteris paribus, with an increase in his degree of risk aversion, the owners investment choice conforms with theory and he invests in a profitable project with certain payoff over a higher-yielding but uncertain future project. This essay is the first study to investigate the effects of future stochastic investment opportunity, asset tangibility and risk aversion exclusively on rash holdings of constrained firms.
Essays On Corporate Financial Risk Management
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Author : Wenrui Zhang
language : en
Publisher:
Release Date : 2019
Essays On Corporate Financial Risk Management written by Wenrui Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
Essays On Corporate Risk Governance
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Author : Mr. Gaizka Ormazabal Sanchez
language : en
Publisher: Stanford University
Release Date : 2011
Essays On Corporate Risk Governance written by Mr. Gaizka Ormazabal Sanchez and has been published by Stanford University this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This dissertation comprises three papers on the governance of corporate risk: 1. The first paper investigates the role of organizational structures aimed at monitoring corporate risk. Proponents of risk-related governance structures, such as risk committees or Enterprise Risk Management (ERM) programs, assert that risk monitoring adds value by ensuring that corporate risks are managed. An alternative view is that such governance structures are nothing more than window-dressing created in response to regulatory or public pressure. Consistent with the former view, I find that, in the period between 2000 and 2006, firms with more observable risk oversight structures exhibit lower equity and credit risk than firms with fewer or no observable risk oversight structures. I also provide evidence that firms with more observable risk oversight structures experienced higher returns during the worst days of the 2007-2008 financial crisis and were less susceptible to market fluctuations than firms with fewer or no observable risk oversight structures. Finally, I find that firms without observable risk oversight structures experienced higher abnormal returns to recent legislative events relating to risk management than firms with observable risk oversight structures. 2. The most common empirical measure of managerial risk-taking incentives is equity portfolio vega (Vega), which is measured as the dollar change in a manager's equity portfolio for a 0.01 change in the standard deviation of stock returns. However, Vega exhibits at least three undesirable features. First, Vega is expressed as a dollar change. This implicitly assumes that managers with identical Vega have the same incentives regardless of differences in their total equity and other wealth. Second, the small change in the standard deviation of returns used to calculate Vega (i.e., 0.01) yields a very local approximation of managerial risk-taking incentives. If an executive's expected payoff is highly nonlinear over the range of potential stock price and volatility outcomes, a local measure of incentives is unlikely to provide a valid assessment of managerial incentives. Third, Vega is measured as the partial derivative of the manager's equity portfolio with respect to return volatility. This computation does not consider that this partial derivative also varies with changes in stock price. The second paper develops and tests a new measure of managerial risk-taking equity incentives that adjusts for differences in managerial wealth, considers more global changes in price and volatility, and explicitly considers the impact of stock price and volatility changes. We find that our new measure exhibits higher explanatory power and is more robust to model specification than Vegafor explaining a wide range of measures of risk-taking behavior. 3. The third paper examines the relation between shareholder monitoring and managerial risk-taking incentives. We develop a stylized model to show that shareholder monitoring mitigates the effect of contractual risk-taking incentives on the manager's actions. Consistent with the model, we find empirically that the positive association between the CEO's contractual risk-taking incentives and risk-taking behavior decreases with the level of shareholder monitoring. Furthermore, consistent with the board anticipating and optimally responding to shareholder monitoring, boards of firms exposed to more intense monitoring design compensation contracts that provide higher incentives to take risks. Overall, our results suggest that, when evaluating risk-taking incentives provided by a compensation contract, it is important to account for the firm's monitoring environment.