We test whether the conversion price (ratio) is viewed by the stock market as a credible signal of the firm's future earnings prospects (Kim, 1990) and subsequently whether convertible debt serves as backdoor equity financing (Stein, 1992). Examining the conversion price in relation to current...

Whether firms pursue shareholder value maximization or the maximization of stakeholder welfare is a controversial issue whose outcomes seem irreconcilable. We propose that firms are likely to compensate their executives for pursuing the firm's goal, either shareholder value maximization or the...

To motivate managers to pursue shareholder interests, boards may design management compensation packages to reward managers for good firm performance. However, Gibbons and Murphy (1992) note that when CEOs are far from retirement, they have career concerns. In these cases, Gibbons and Murphy...

Whether equity-based compensation and equity ownership aligns the interests of managers with stockholders is an important question in finance. Early studies found an inverted U-shaped relation between managerial ownership and firm value, but later studies using firm fixed effects found no...

Previous studies show that co-managers mainly affect IPO aftermarket activities. We investigate the role of co-managers in IPO premarket activities. We argue that co-managers help reduce IPO placement risk and hypothesize that IPO issuers hire more co-managers when placement risk is higher. We...

The purpose of this article is to test empirically the impact of key executive death on the value of the firm's stock. For this purpose, data on 127 key executives who died over the period 1967 to 1981 was collected. These executives were from firms whose stocks traded on either the NYSE or the...