Albagli, Elias; Hellwig, Christian; Tsyvinski, Aleh - C.E.P.R. Discussion Papers - 2011
and its investment decisions leads to a systematic premium in the firm's share price relative to expected dividends. Noisy … firm shifts its dividend risk to the upside, which amplifies the overvaluation and explains the premium. Second, we argue … that explicitly linking managerial compensation to share prices gives managers an incentive to manipulate the firm …