In 1986 Pacific Lumber (PL). the largest private owner of old-growth redwood trees, was acquired in a highly leveraged hostile takeover by MAXXAM Group. MAXXAM subsequently doubled the rate at which PL harvested its ancient redwoods, precipitating 10 years of environmental protests and intensive...

This paper reproduces a survey - previously applied in two different Continents, North America and Europe - to inquire about cost of capital, capital budgeting, capital structure, and corporate governance. The survey utilized in this article is Graham amp; Harvey's survey ( 2001) and its...

As the oversight role of the corporate board in Enterprise Risk Management (ERM) expands, companies feel the need to fill a knowledge gap on effective risk governance practices.The concept of correlating risk management, governance, and strategy in an enterprise-wide structure first appeared in...

Having focused heavily on Sarbanes-Oxley requirements and more rigorous corporate governance and compliance standards, U.S. corporate boards are now beginning to assess their evolving role in providing oversight in the area of enterprise risk management (ERM).This paper documents how boards of...

We examine the impact of the agency conflicts of debt on firm financing decision. Consistent with the hypothesis that firm financing policy is determined by the tradeoff between the market for corporate control (takeover defenses) and managerial opportunism, we find that managerial equity...

We show that the agency theory of overvalued equity (see Jensen, 2005) rather than investors' fixation on accruals explains the accrual anomaly, i.e., abnormal returns to an accrual trading strategy (see Sloan, 1996).Under the agency theory of overvalued equity, managers of overvalued firms are...

In a dynamic continuous-time model, we examine the impact of a manager-shareholder conflict over the choice of investment risk on firm value and optimal capital structure. The manager's optimal investment risk policy is substantially different from the policy that maximizes equity or total firm...

We propose that stronger creditor rights in bankruptcy reduce corporate risk-taking. Employing country-level data, we find that strong creditor rights are associated with a greater propensity of firms to engage in diversifying mergers, and this propensity changes in response to changes in the...

In this paper we study the ways in which the firm's choice of liquid assets is affected by the pattern of share ownership and by the control structures within the firm. We distinguish between three separate ways in which these relationships can affect liquidity. First, ownership concentration...

We use a sample of U.S. dual-class companies to examine how the divergence between insider control rights and cash-flow rights affects managerial extraction of private benefits of control. We find that as the insider control-cash flow rights divergence becomes larger, dual-class acquirers...