We conduct a detailed empirical study of the effects of cash flow volatility on corporate bond yield spreads. Using a lengthy sample of transaction prices for investment grade straight bonds, we show that cash flow risk has strong statistical significance and economic effects on spreads, after...

In response to corporate governance concerns, SEC disclosure rules, and encouragement by Institutional Shareholder Services, most large U.S. public firms have adopted executive stock ownership requirements in recent years. Compared to CEOs already in compliance, CEOs who have not yet fulfilled...

Traditional Executive Stock Option plans typically allow fixed numbers of options to vest over a period of several years, independent of stock price performance. Such options may climb deep in-the-money long before the manager is permitted to exercise them, potentially making the manager more...

Benveniste and Wilhelm (1990) address the problem of an Initial Public Offer where the issuer uses the bookbuilding method to elicit information from potentially informed regular investors. Bamp;W contend that regulatory constraints on the ability of underwriters to price discriminate between...

We model a competitive industry where managers choose quantities and costs to maximize a combination of firm profits and benefits from expropriation. Expropriation is possible because of corporate governance lsquo;slack' permitted by the government. We show that corporate governance slack...

Cross-border mergers allow firms to alter the level of protection they provide to their investors, because target firms usually import the corporate governance system of the acquiring company by law. Therefore, cross-border mergers provide a natural experiment to analyze the effects of changes...

We examine the nurturing effect of Anti-Takeover Provisions (ATPs) on corporate innovation, and the interpretation that ATPs protect firms against undervaluation in the market. We illustrate that the effect is driven by explorative, as opposed to exploitative, innovation. This casts doubt on the...

This paper helps to explain the dividend patterns of large corporations by presenting a dynamic model where payout based incentives simultaneously mitigate opportunistic actions (perquisites) and induce managers to convey inside information to the market. Incentive compatibility links the...

Following John Graham's (2022) presidential address we develop a simple financing decision-rule under which leverage is not a priority unless it hits `dangerous' levels, and show how this rule helps reduce the gap between research and reality. The rule leads to debt financing that is distinct...

We clarify and reinterpret the results of Benveniste and Wilhelm (1990) concerning the effect of a uniform price restriction on the proceeds of an IPO. If regular institutional investors are, on average, at least as well informed as ordinary retail investors then our corrected version of...