Showing 1 - 10 of 14
Persistent link: https://www.econbiz.de/10005397351
While IPOs have been underpriced by more than 10% during the past two decades, we find that in a sample of more than 2,000 IPOs from 1980 to 1997, the median IPO was significantly overvalued at the offer price relative to valuations based on industry peer price multiples. This overvaluation...
Persistent link: https://www.econbiz.de/10005564058
This paper extends the current theoretical models of corporate risk-management in the presence of financial distress costs and tests the model's predictions using a comprehensive data set. I show that the shareholders optimally engage in ex-post (i.e., after the debt issuance) risk-management...
Persistent link: https://www.econbiz.de/10005376604
How does the banking sector’s financial health affect bank-dependent borrowers’ performance? We use the exogenous shock to U.S. banking system during the Russian crisis of Fall 1998 as a natural experiment to separate the effect of borrower’s demand of credit from the bank’s ability to...
Persistent link: https://www.econbiz.de/10005411337
An originate-to-distribute (OTD) model of lending, where the originator of a loan sells it to various third parties, was a popular method of mortgage lending before the onset of the subprime mortgage crisis. We show that banks with high involvement in the OTD market during the pre-crisis period...
Persistent link: https://www.econbiz.de/10010535014
How does the banking sector’s financial health affect bank-dependent borrowers’ performance? We use the exogenous shock to U.S. banking system during the Russian crisis of Fall 1998 as a natural experiment to separate the effect of borrower’s demand of credit from the bank’s ability to...
Persistent link: https://www.econbiz.de/10010723865
Using a large sample of bank loans issued to U.S. firms between 1990 and 2004, we find that lower takeover defenses (as proxied by the lower G-index of Gompers, Ishii, and Metrick 2003) significantly increase the cost of loans for a firm. Firms with lowest takeover defense (democracy) pay a 25%...
Persistent link: https://www.econbiz.de/10005024385
Persistent link: https://www.econbiz.de/10005715967
We consider the effect of hedging with foreign currency derivatives on Brazilian firms in the period 1997 through 2004, a period that includes the Brazilian currency crisis of 1999. We find that, derivative users have valuations that are 6.7-7.8% higher than non-user firms. Hedging with currency...
Persistent link: https://www.econbiz.de/10005721044
We undertake a broad-based study of the effect of managerial risk-taking incentives on corporate financial policies and show that the risk-taking incentives of chief executive officers (CEOs) and chief financial officers (CFOs) significantly influence their firms' financial policies. In...
Persistent link: https://www.econbiz.de/10008488778