Purpose – Firms will, at times, replace employee holdings of out-of-the-money stock options with new ones that have lower exercise prices. This paper seeks to examine how stockholders view such actions. Design/methodology/approach – The stock price reaction to announcements of option...

The problems that plagued the thrift industry during the 1980s were primarily due to greater macroeconomic uncertainty and to inconsistent public policies. The slow regulatory response to the industry's problems was largely the result of the regulator's unwillingness to face up to the...

A comprehensive empirical examination of a relatively new form of leverage-increasing transaction known as a leveraged recapitalization (LR) is presented. Although similar to a leveraged buyout, the LR differs from LBOs in that the firm remains public instead of going private. We find...

This paper investigates the role of insider trading as an explanati on for the observed preannouncement price run-ups for takeover targets. The authors hypothesize that if insider trading is a significant cont ributor to such price run-ups, then observed run-ups should be small for takeovers...

We use a sample of international joint venture announcements to test the hypothesis that organizations learn from experience, such that prior learning enhances the value of later ventures. We find that experience with ventures in the same foreign location, as well as experience with...

I investigate whether obtaining a regulatory seal of approval adds to firm value. For a sample of 34 firms that acquired the insured deposits of failed banks, I find a significantly greater price response for firms that could benefit from obtaining a regulatory seal of approval than for firms...

Do mergers with greater target relative to acquirer size create more value than mergers with smaller relative sized targets? Do larger bid amounts represent wealth transfers from acquirers or do they signal greater expected merger gains? We hypothesize that the relations among aggregate merger...