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This paper examines the longer-term relation between CEO cash compensation and changes in firm value. Following the methodology of Jensen and Murphy we find that the sensitivity over longer windows (6 to 10 years) is on average nine times greater than the one year sensitivity reported in Jensen...
Persistent link: https://www.econbiz.de/10012754775
The revelation that scores of firms engaged in the illegal manipulation of stock options' grant dates (i.e. quot;backdatingquot;) captured much public attention. The evidence indicates that the consequences stemming from management misconduct and misrepresentation are of first-order importance...
Persistent link: https://www.econbiz.de/10012711479
Since academic scholars and the Wall Street Journal reported widespread evidence indicating that option grants to executives were backdated, an avalanche of news stories followed documenting this ever-widening corporate scandal. In this study we ask: quot;How do disclosures of backdating affect...
Persistent link: https://www.econbiz.de/10012711568
Shareholders activists and regulators are pressuring U.S. firms to separate the titles of CEO and Chairman of the Board. They argue that separating the titles will reduce agency costs in corporations as well as potentials benefits. Our empirical evidence provides preliminary support for the...
Persistent link: https://www.econbiz.de/10012789218
We examine the effects of inflation on the standard, Constant-Growth valuation model found throughout the finance literature. We find that the presence of inflation vitiates the generally accepted expression of this model for the value of a firm that either makes no new investments or invests...
Persistent link: https://www.econbiz.de/10012740238
In any context where a discounted cash flow valuation is required, there is the issue of estimating the continuing value. The most common way to do that is to assume that by the terminal horizon the company is in a steady state and is growing at a constant rate. The issue is how to handle...
Persistent link: https://www.econbiz.de/10013245991
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Persistent link: https://www.econbiz.de/10005286170
This paper reviews the arguments concerning the role and effects of insider trading. In reviewing the law of insider trading, we concentrate on the main elements of the regulatory framework and court interpretations. We discuss economic issues involved in the debate over the benefits and costs...
Persistent link: https://www.econbiz.de/10005044519
We examine the impact of political, institutional, and economic factors on the choice between selling a state-owned enterprise in the public capital market through a share issue privatization (SIP) and selling it in the private capital market in an asset sale. SIPs are more likely in less...
Persistent link: https://www.econbiz.de/10005214401