Compensation committees face special difficulties when setting pay in the last years of a CEO's tenure. For example, incentives to manipulate earnings for the purpose of enhancing earnings-based compensation are greater in CEOs' terminal years. We predict that compensation committees are aware...

Using a large sample of bank loans obtained by U.S. firms, we examine the relation between cash holdings and access to external finance via bank loans. We document a negative relation between cash holdings and loan spreads. This negative relation is confirmed in a sub-sample of quasi-exogenous...

This study documents and examines a decrease in the price discounts associated with private investments in public equity (PIPE) issues. PIPE discounts decreased from an average of 16.4 percent during the 1995 to 2000 period to an average of 9.8 percent during the 2001 to 2007 period. This...

This paper proposes that a firm's choice of organizational form is a trade-off between the fit with its investment opportunity set, and its attempt to exploit periods of favourable market valuations for a given organizational form. To test this prediction, we identify 272 firms that go public in...

We examine the effect of corporate spinoffs on the trading environment of the stock of firms that spinoff units. Spinoffs change the information environment of firms. The increased precision and quantity of information will change the relative advantage of informed traders. Consistent with...

Executive stock options and convertible securities can increase the number of common shares outstanding while adding less than the market value of the newly issued securities to a firm's assets. We model the effect of expected dilution on the earnings/return relation. Expected dilution...

Managers in their terminal years have an incentive to manipulate earnings to enhance earnings based bonuses. We examine this horizon problem by considering the role of the compensation committee in setting terminal-year compensation. We predict that compensation committees are aware of the...