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Disclosure and the Cost of Capital : Evidence from Firms' Responses to the Enron Shock

Leuz, Christian - 2010

that firms' disclosure responses reduce firms' costs of capital and hence the impact of the transparency crisis …This paper examines the link between disclosure and the cost of capital. We exploit an exogenous cost of capital shock … created by the Enron scandal in Fall 2001 and analyze firms' disclosure responses to this shock. These tests are opposite to …

Persistent link: https://www.econbiz.de/10012757529

Selection Versus Talent Effects on Firm Value

Chang, Briana - 2018

Measuring the value of labor-market hires for stock prices, be it underwriters when firms go public (IPOs) or chief executive officers (CEOs), is difficult due to selection. Opaque firms with higher costs of capital benefit more from prestigious underwriters, while productive firms benefit more...

Persistent link: https://www.econbiz.de/10012917596

May the Force Be with You : Investor Power and Company Valuations

Hellmann, Thomas - 2018

This paper examines the effect of investor power in a model of staged equity financing. It shows how the usual effect where market power reduces valuations can be reversed in later rounds. Once they become insiders, powerful investors may use their market power to increase, not decrease...

Persistent link: https://www.econbiz.de/10012908480

A Clinical Exploration of Value Creation and Destruction in Acquisitions : Organizational Design, Incentives, and Internal Capital Markets

Kaplan, Steven N.; Mitchell, Mark; Wruck, Karen H. - 2021

This paper presents clinically-based studies of two acquisitions that received very different stock market reactions at announcement one positive and one negative. Despite the differing market reactions, we find that ultimately neither acquisition created value overall. In exploring the reasons...

Persistent link: https://www.econbiz.de/10013226921

The Effect of Insider Trading on Insiders' Reaction to Opportunities to "Waste" Corporate Value

Bebchuk, Lucian A.; Fershtman, Chaim - 2021

This paper analyzes certain effects of insider trading on the principal-agent problem in corporations. Specifically, we focus on those managerial choices that confront managers with the need to decide between options that produce different corporate value but do not differ in the managerial...

Persistent link: https://www.econbiz.de/10013234973

Growth Options and Firm Valuation

Kraft, Holger - 2013

This paper studies the relation between firm value and a firm's growth options. We find strong empirical evidence that (average) Tobin's Q increases with firm-level volatility. The significance mainly comes from R&D firms, which have more growth options than non-R&D firms. By decomposing...

Persistent link: https://www.econbiz.de/10013085928

Decomposing Firm Value

Belo, Frederico - 2019

What are the economic determinants of a firm's market value? We answer this question through the lens of a generalized neoclassical model of investment with physical capital, quasi-fixed labor, and two types of intangible capital, knowledge and brand capital as inputs. We estimate the structural...

Persistent link: https://www.econbiz.de/10012865755

Complex Ownership Structures and Corporate Valuations

Laeven, Luc - 2010

The bulk of corporate governance theory examines the agency problems that arise from two extreme ownership structures: 100 percent small shareholders or one large, controlling owner combined with small shareholders. In this paper, we question the empirical validity of this dichotomy. In fact,...

Persistent link: https://www.econbiz.de/10012760554

Intangible Value

Eisfeldt, Andrea L.; Kim, Edward; Papanikolaou, Dimitris - 2022

Intangible assets are absent from traditional measures of firm value despite their growing importance in firms' capital stocks. We propose a simple improvement to the classic Fama and French (1992, 1993) value factor that incorporates intangibles and addresses differences in accounting practices...

Persistent link: https://www.econbiz.de/10013289315

Learning and the Value of the Firm

Kiyotaki, Nobuhiro - 2021

The paper studies under what conditions the value of the firm occasionally increases for a while before it suddenly drops, like a "bubble". We consider the environment where the trend of net cash flow from a firm's production depends on uncertain quality of a manager, and the manager is...

Persistent link: https://www.econbiz.de/10013252321