We analyze a new form of call provision known as a quot;make-wholequot; call which utilizes a floating call price based on the level of current interest rates. As rates drop (rise), the call price increases (decreases). Typically, a floor at par value prevents the call price from dropping below...

We use a structural model to examine whether make-whole call provisions - a recent yet surprisingly common innovation in corporate debt markets - are fairly priced at origination. The call provision cost is calculated as the callable bond yield minus the equivalent non-callable bond yield,...

We examine the investment behavior of firms before and after being spun off from their parent companies. Their investment after the spin-off is significantly more sensitive to measures of investment opportunities (e.g., industry Tobin's Q or industry investment) than it is before the spin-off....

I analyze 181 equity carve-outs to determine whether the transactions are motivated by potential efficiency improvements or by an opportunity to sell overvalued equity. Carve-out operating performance peaks at issue, declining significantly thereafter. Parents sell a greater percentage of shares...

An extensive prior literature documents the sensitivity of CEO turnover to performance. However, little is known about turnover in the firm's internal labor market. We compare the likelihood of turnover following poor performance for a sample of subsidiary managers inside conglomerate firms to...

I analyze a sample of 187 spinoffs, 204 selloffs and 181 carveouts that occurred between 1981 and 1998. Using pre-divestiture operating data for the divested division and parent, I quantify the determinants of the chosen divestiture method. Univariate and multivariate logistic regression results...