Modigliani and Miller (M&M) proposed that investors forgo dividends, leaving the money available for reinvestment as retained earnings. This recommendation takes two parts: Proposition III, i.e., a dividend has no impact on market value, and Proposition IV, i.e., that financial policy is of no...

The existing replication policies at top finance journals are far weaker than the policies at top economics journals. This paper explores both the costs and benefits of having a stronger replication policy in the context of my failed 2010 initiative to develop a unified policy across all top...

Payouts, in the form of dividends and buybacks, reached a height of almost a trillion dollars per annum in recent years. A large proportion of these dollars have been directly reinvested into the stock market. Drawing on data on mutual fund holdings, I show that capital repayments are...

According to the International Monetary Fund, emerging markets now represent more than a third of global GDP — and are expected to grow at a faster rate than advanced economies. With such explosive growth, investors often assume that an investment strategy focused on growth would yield better...

The Financial Crisis of 2008/2009 increased plan sponsors' desire to control risk — and we are still seeing the unfortunate effects. Many approaches adopted to control risk are illusions of risk control. Of particular concern is how sponsors are misapplying tools designed to monitor...

We examine whether the presence of privately informed traders, and information asymmetries between these traders and the rest of investors, undermine the role of accounting information in mitigating financing constraints and reducing under-investment problems. In line with prior research, we...

This research considers the strategies on the initial public offering of company equity at the stock exchanges in the imperfect highly volatile global capital markets with the nonlinearities. We provide the IPO definition and compare the initial listing requirements on the various markets. We...

Using management earnings forecasts over the period 1996-2010, I find that the sensitivity of forecast revisions to contemporaneous stock returns is increasing in the amount of investors' private information in prices. This effect remains after controlling for various confounds and is robust to...

Economic Value Added (EVA™) and competing metrics are a leitmotif for management, strategy consultants and Wall Street. Such metrics, the synthesis of M&M proposition III and the notion of residual income, form the scholarly framework on value creation. However, the empirical evidence is poor,...