When planning to raise new equity capital listed firms in Germany almost always buy insurance against the risk of failure by signing an underwriting agreement with a bank, even in case of rights offerings. We calculate the fair price for this insurance and for the rights which can be considered...

We study the link between underpricing of initial public offerings (IPOs) and index excess returns in secondary markets. We use a theoretical model to argue that underpricing of IPOs raises investors’ attention and, thereby, triggers investments in secondary markets. Our theoretical model...

A supervisory board might be seen as an advantageous element of corporate governance. Whether supervision of management is actually beneficial is analyzed under the assumption that the supervisor is not immune to misjudgment as a monitor or may not be a good consultant. The benefits of having...