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Morellec, Erwan; Zhdanov, Alexei - Institut für Schweizerisches Bankwesen <Zürich> - 2006

This paper analyzes the interaction between financial leverage and takeover activity. We develop a dynamic model of …, and takeover terms, in which the bidder with the lowest leverage wins the takeover contest. Based on the resulting … bidder is below the industry average and that acquirers should lever up after the takeover consummation. The model also …

Persistent link: https://www.econbiz.de/10005858240

Consistent valuation of project finance and LBO'susing the flows-to-equity method

Cooper, Ian; Nyborg, Kjell G. - Institut für Schweizerisches Bankwesen <Zürich> - 2010

A common method of valuing the equity in leveraged transactions is the flows-to-equity method whereby the free cash flow available to equity holders is discounted at the cost of equity. This method uses a standard definition of equity free cash flow, but the cost of equity varies over time as...

Persistent link: https://www.econbiz.de/10009354137

Foreign vs. domestic listing: an entrepreneurial decision

Ding, Yuan; Nowak, Eric; Zhang, Hua - Institut für Schweizerisches Bankwesen <Zürich> - 2007

In this paper, we use a unique hand-collected dataset to analyze stock listing as an entrepreneurial decision. By comparing mainland Chinese entrepreneurial firmslisted in Hong Kong with the same type of firms opting for a domestic listing on the Shenzhen second board market, we argue that the...

Persistent link: https://www.econbiz.de/10005857778

Managerial Ownership and Firm ValueEvidence from Small Firms listed in Germany

Kast, Manuel - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

Using a new data set of small public firms in Germany, this paper analyzes the incentive and entrenchmenteffects associated witrh mangerial equity owernership. The relationship between firm value and insider ownership is found to be nonlinear: at low levels of ownership firm value is positive...

Persistent link: https://www.econbiz.de/10005857792

Should Financial Institutions own equity? -A Test of the German Bank Influence Model

Kast, Manuel - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

This paper tests two competing hypotheses about the influence of financial institutions as large shareholders on the performance of their industrial portfolio firms: the superior monitoring hypothesis versus the rent extraction hypothesis. The methodology of this study exploits the abolishment...

Persistent link: https://www.econbiz.de/10005857793

An Analysis of Shareholder Agreements

Chemla, Gilles; Habib, Michel A.; Ljungqvist, Alexander - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

Shareholder agreements govern the relations among shareholders in privately-held ﬁrms, such as joint ventures or venture capital-backed ﬁrms. We provide an explanation for the use of put and call options, tag-along rights, drag-along rights, demand rights, piggy-back rights, and catch-up...

Persistent link: https://www.econbiz.de/10005858017

Mergers and Asset Prices in a Firm Network Economy

Brumen, Gorazd - Institut für Schweizerisches Bankwesen <Zürich> - 2007

We examine merger activity and its effect on asset pricing in a ﬁrm network economy. Mergers create internal capital markets which change the cash ﬂow risk structure of the merging ﬁrms. We propose a solution concept for coalitional games without the superadditivity axiom, which extends...

Persistent link: https://www.econbiz.de/10005858047

Director independence as strategic behavior

Wagner, Alexander F. - Institut für Schweizerisches Bankwesen <Zürich> - 2007

This paper analyzes the independence of boards of directors as an optimally chosen, non-contractible behavior. A board behaves loyally to a CEO when it agrees to a negative NPV-pro ject, giving the CEO private beneﬁts. While the CEO beneﬁtsfrom competent directors because they help him make...

Persistent link: https://www.econbiz.de/10005858055

Stock Returns in Mergers and Acquisitions

Hackbarth, Dirk; Morellec, Erwan - Institut für Schweizerisches Bankwesen <Zürich> - 2006

This paper develops a real options framework to analyze the behavior of stock returns in mergers and acquisitions. In this framework, the timing and terms of takeovers are endogenous and result from value-maximizing decisions. The implications of the model for abnormal announcement returns are...

Persistent link: https://www.econbiz.de/10005858239

Which Way to Grow? Merging, Allying, or Buying Assets

Habib, Michel A.; Mella-Barral, Pierre - Institut für Schweizerisches Bankwesen <Zürich> - 2006

We characterize the conditions under which firms choose to (i) merge, (ii) form an alliance, or (iii) trade assets. For that prupose, we distinguish between the firms' assets (what can be traded in isolation), thei knowhow (what can be learned but not traded), and their core competencies (what...

Persistent link: https://www.econbiz.de/10005858361