Showing 1 - 10 of 12
We examine leverage changes around mergers by similar-size firms. If asset characteristics drive leverage, both acquirer and target pre-merger leverage should predict long-term post-merger leverage. We find that only acquirer pre-merger leverage has a long-term effect. The effect of target...
Persistent link: https://www.econbiz.de/10013079974
We develop a mathematical proof demonstrating that only financially-strong firms will sell put options on their own stock, but financially-weak firms will not. The sale of options on a company's own stock exposes the buyer to default risk of the issuer, which additionally complicates the payoff...
Persistent link: https://www.econbiz.de/10013097053
Traditional target structure theories predict that all financing decisions move firms towards target capital structures. On the other hand, transitory debt hypothesis predicts that firms deliberately but temporarily deviate from target capital structures to fund a particular corporate action and...
Persistent link: https://www.econbiz.de/10013092671
This study provides further evidence of earnings management around security offerings. We find positive and significant discretionary current accruals coincident with offerings of reverse LBOs. Issuers in the most quot;aggressivequot; quartile of earnings management have a one-year aftermarket...
Persistent link: https://www.econbiz.de/10012762498
U.S. labor laws impose higher costs on unionized firms in states without right-to-work (RTW) laws. I find that these firms experience poor stock performance. The difference-in-differences analysis comparing the effect of RTW laws on unionized and nonunionized firms shows that unionized firms in...
Persistent link: https://www.econbiz.de/10012955814
In the U.S., the costs of unionized labor are higher in states without right-to-work (RTW) laws. I show that unionized firms located in these states invest less. These firms have about four percentage points lower capital expenditures (normalized by net property, plant, and equipment) than other...
Persistent link: https://www.econbiz.de/10012901845
Using corporate social responsibility (CSR) scores, we examine the effect of unionization on non-shareholding stakeholders and the value of CSR for unionized firms. We show that unionization leads to lower CSR. The negative relation between unionization and CSR is stronger for financially...
Persistent link: https://www.econbiz.de/10012899478
Using corporate social responsibility (CSR) scores, we examine the effect of unionization on non-shareholding stakeholders and the value of CSR for unionized firms. Our findings suggest that unionization leads to lower CSR. This negative relation between unionization and CSR is stronger for...
Persistent link: https://www.econbiz.de/10012823524
High leverage can be used to improve a firm's bargaining position with unions. I show that in the U.S. such use of leverage is concentrated in states without right-to-work (RTW) laws. The use of high leverage by unionized firms in these states is associated with high market-to-book ratios and is...
Persistent link: https://www.econbiz.de/10013054156
We examine investment by different types of institutional investors in underperforming firms with agency problems complicated by laws and regulations: U.S. firms with strong labor unions. As unions have special powers granted by government, unions have to serve the interests of politicians if...
Persistent link: https://www.econbiz.de/10013243565