This research focuses on the ultimate impact of hedging effectiveness on firm performance. Successful risk management in firms should lead to a lesser occurrence of lower business outcomes than higher outcomes (e.g., positive skewness in quarterly earnings per share). We empirically estimate the...

While the literature appeals to efficiency arguments from agency theory to explain the relative rise of CEO equity compensation, prior work has given less focus to CEO pay contracts based on equity and cash incentives that directly (analytically) maximize the total return of firm owners. The...

The venture industry relies extensively on convertible contracts that allow VCs to convert their investments into an equity stake or a fixed debt position at a future date. We study convertible venture investments exposed to failure risk and valuation uncertainty using a double-hazard framework...