This study examines the financing choices of firms operating in a weak institutional environment. We argue that in relationship-based systems, global financing and political connections are substitutes: Well-connected firms are less likely to access foreign capital markets because (state-owned)...

This paper seeks to draw attention to a flaw in the firm’s Free Cash Flow model and related statement widely accepted in Corporate Finance. We argue that the common offset of any Current Liabilities against Current Assets distorts the FCF size, composition, and volatility, thereby misstating...

This study derives and evaluates estimates of the equity risk premium inferred from the stock prices and analysts’ earnings forecasts of U.S. insurance companies. During most of the sample period, April 1983 through September 2012, the quarterly median implied equity risk premium (IERP) of...

The case of Evergreen Solar (ESLR) suggests counterparty risk exposure be added to the litany of misgivings on the economic efficiency, absolute performance, and governance conflicts of ASRs. Evergreen Solar in July 2008 issues a convertible, enters into an offsetting, broker-backed long...

It is time for accounting to recognize the existence of stock exchanges and stop treating the equity accounts of public corporations as if they belonged to 15th century private partnerships. When Pacioli's codification of the principles of accounting was published in 1494, stock exchanges did...

Previous studies of corporate stock repurchase programs found low efficiency (high execution cost), questionable performance (inconsistent profitability), idiosyncratic transaction reporting (monthly cost reports may not match actual monthly transactions), archaic shareholder accounting...

In June 2008, a study by Sen confirmed previous findings that 10b5-1 insider stock sale programs (quot;plan salesquot;) are conducted after unusual price run ups, but Sen also found that, in months subsequent to plan sales, stock performance then essentially matched the market. Sen's results on...

The current study briefly considers KLA-Tencor's 2007 $750 million accelerated stock repurchase (ASR). Companies commonly indicate ASRs contractually promise execution of stock buybacks at a discount to market. To the contrary, analysis of a small sample of 2006-2007 ASRs finds:1) Inferior...

We extend our prior work on how both supply (including the emergence of OTC equity derivatives and growth in share lending) and demand (including the growth of hedge funds) factors now facilitate the large-scale, low-cost decoupling of shareholder voting rights from shareholder economic...

This is a summary, practitioner-oriented article which summarizes our research on debt and hybrid decoupling. Equity decoupling refers to the unbundling of the rights and obligations normally associated with shares. Debt decoupling refers to the unbundling of the economic and governance rights...