Financial leverage increases the expected return on equity. We show that this leverage effect is not only irrelevant for shareholders' present wealth but also for the return on their invest-ments. This result is straightforward if we do not only look at the return on equity but at the return on...

This contribution discusses a number of ideas for using a shareholder value approach to the problems of risk-adjusted performance measurement and the issue of capital allocation. We demonstrate that, if shareholder value is to be consistently maximised, then not only the total amount of equity...

[...]In this paper, we employ a different empirical strategy tostudy the effects of ownership structure on firm performancethat is free from any corporate events in the ratherhomogenous banking industry. In essence, the performance ofpublicly traded bank holding companies (BHCs) is comparedwith...

[...]We also concentrate our survey on literature that testseconomic hypotheses within samples of U.S. firms. However,we believe that much of our discussion can be generalized tofirms throughout the world. Bushman and Smith (2003)present a broad overview of how differences in...

[...]In this paper, I survey the academic literature onblockholders and corporate control. As with any survey paper,I must be selective. Thus, I focus on empirical research, as Ibelieve that much of what we know about blockholders hascome through empirical investigations as opposed totheoretical...

[...]A fundamental objective of governance research inaccounting is to investigate the properties of accountingsystems and the surrounding institutional environmentimportant to the effective governance of firms. Bushman andSmith (2001) provide an extensive survey and discussion ofgovernance...