We examine whether firms manage earnings before issuing bonds to achieve a lower cost of borrowing. We find significant income-increasing earnings management prior to bond offerings. We also find that firms that manage earnings upward issue debt at a lower cost, after controlling for various...

We find that post-merger equity risk is negatively related to the sensitivity of CEO wealth to stock return volatility (vega), but is concentrated in CEOs with high proportions of options and options that are more in-the-money. The probability of industrial diversification also increases in...