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Why Higher Takeover Premia Protect Minority Shareholders

Burkart, Mike - 2001

Posttakeover moral hazard by the acquirer and free-riding by the target shareholders lead the former to acquire as few shares as necessary to gain control. As moral hazard is most severe under such low ownership concentration, inefficiencies arise in successful takeovers. Moreover, share supply...

Persistent link: https://www.econbiz.de/10012788409

Why is hedge fund activism procyclical?

Burkart, Mike; Dasgupta, Amil - C.E.P.R. Discussion Papers - 2013

We provide a theoretical model to explain the procyclicality of hedge fund activism. In our model, hedge funds which … incentives for activism and engendering procyclicality. Our model thus provides a theoretical explanation that links the … procyclicality of hedge fund activism with increases in the leverage or payouts ratios of target firms. In addition, the model …

Persistent link: https://www.econbiz.de/10011084491

Financial literature about discounted cash flow valuation

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

There is a wealth of literature about discounted cash flow valuation. In this paper, we will discuss the most important papers, highlighting those that propose different expressions for the value of the tax shield (VTS). The discrepancies between the various theories on the valuation of a...

Persistent link: https://www.econbiz.de/10005021801

The value of tax shields with a fixed book-value leverage ratio

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

The value of tax shields depends only on the nature of the stochastic process of the net increases of debt. The value of tax shields in a world with no leverage cost is the tax rate times the current debt plus the present value of the net increases of debt. We develop valuation formulae for a...

Persistent link: https://www.econbiz.de/10005021816

Shareholder value creators in the S&P 500: 1991-2010

Fernandez, Pablo; Aguirreamalloa, Javier; Corres, Luis - IESE Business School, Universidad de Navarra - 2011

shareholders ($4.5 trillion). In 1991-1999 it created value ($5.1 trillion), but in 2000-2010 it destroyed $9.6 trillion. The market value of the S&P 500 was $2.8 trillion in 1991 and $11.4 trillion in 2010. We also calculate the created shareholder value of the 500 companies during the 18-year...

Persistent link: https://www.econbiz.de/10008913293

The Value of Tax Shields Depends Only on the Net Increases of Debt

Fernandez, Pablo - 2006

Persistent link: https://www.econbiz.de/10012735081

The Value of Tax Shields with a Fixed Book-Value Leverage Ratio

Fernandez, Pablo - 2006

Persistent link: https://www.econbiz.de/10012735082

Financial Literature About Discounted Cash Flow Valuation

Fernandez, Pablo - 2006

Persistent link: https://www.econbiz.de/10012735214

The Value of Tax Shields Depends Only on the Stochastic Process of the Net Increase of Debt

Fernandez, Pablo - 2005

The value of tax shields depends only on the nature of the stochastic process of the net increase of debt. The value of tax shields in a world with no leverage cost is the tax rate times the current debt, plus the tax rate times the present value of the net increases of debt. By applying this...

Persistent link: https://www.econbiz.de/10012736236

The Value of Tax Shields is Not Equal to the Present Value of Tax Shields : A Correction

Fernandez, Pablo - 2005

I correct some expressions of Fernandez (2004) and provide a more general expression for the value of tax shields. This expression is the difference between the present values of two different cash flows, each with its own risk: The present value of taxes for the unlevered company and the...

Persistent link: https://www.econbiz.de/10012736996