We hypothesize that corporate takeover markets create significant constraints for short sellers. Both short sellers and corporate bidders often target firms with declining economic prospects. Yet, a target firm's stock price generally increases upon a takeover announcement, resulting in losses...

We investigate whether incentives to join the Fortune 500 affect corporate decisions. Firms closer to the cutoff appear to take actions to join the list by engaging in more M&A activity, bidding for larger targets, and paying higher takeover premia. Further, the relation is stronger for firms...

We use a unique dataset of product warranty offerings by firms to investigate the effect of a firm's warranty reserve levels on its capital structure decisions. Our sample consists of firms that (i) offer explicit warranties, (ii) likely offer implicit product warranties, and (iii) are in...

We examine the role of hedge funds as primary lenders to corporate firms. We investigate boththe reasons and the implications of hedge funds’ activities in the primary loan market. Weexamine the characteristics of firms that borrow from hedge funds and find that borrowers areprimarily firms...

The key insight from the seminal work by Modigliani and Miller (1958) is that market imperfections are necessary for financial decisions such as the debt vs. equity to impact firm value. When firms choose debt finance, they must also decide between public debt (e.g., corporate bonds) and private...

We examine the role of hedge funds as primary lenders to corporate firms. We investigate both the reasons and the implications of hedge funds' activities in the primary loan market. We examine the characteristics of firms that borrow from hedge funds and find that borrowers are primarily firms...

I propose a simple model with complete and perfect information that analyzes the relation between managerial incentive compensation and the firm's choice between public and bank debt. My analysis of firm-level data over the period 1992-2005 offers considerable support to the predictions of the...