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We examine the impact of mispricing on corporate investments and its components: capital expenditures, research and development, acquisitions, and asset sales. By decomposing the market-to-book ratio into mispricing and growth components, we show that corporate investments are linked to...
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We study the capital structure reactions of firms that have been added to Standard & Poor's (S&P's) CreditWatch list in order to test the role of credit ratings in firm financial decisions. Survey evidence by Graham and Harvey (2001) indicates that Chief Financial Officers (CFOs) consider credit...
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Purpose - The purpose of this paper is to examine the risk-incentive effect of CEO stock options in the banking industry. Design/methodology/approach - For a sample of industrial mergers, Williams and Rao find that the risk-incentive effect of CEO stock options is associated with higher...
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