We examine the relation between corporate diversification, real earnings management, and firm value. Our analysis indicates that industrial diversification and the combination of industrial and global diversification exacerbate real activities manipulation, whereas global diversification...

In this paper, we investigate the effects of information asymmetry across equity investor groups as an explanation for the capital structure decisions of the firm. We test empirically whether differences in information across outside investors have any bearing on the leverage ratios of firms and...

Income trust units are some of the highest selling products in the Canadian securities industry, but they have been less successful beyond Canadian borders. The author discusses the remarkable profitability and proliferation of income trusts in Canada, but maintains that arguments in favour of...

We use price pressure resulting from purchases by mutual funds with large capital inflows to identify overvalued equity. This is a relatively exogenous overvaluation indicator as it is associated with who is buying ndash; buyers with excess liquidity ndash; rather than what is being purchased....

In this paper we present some contingent claim analysis’ models for the firm value. We focus on two different approaches: the structural (Merton) approach and a new one that treats the asset value as a claim on the firm’s securities. The non-observability of the assets’...

This study examines the market's reaction when hospitality firms announce the issuance of new debt and equity. Results indicate that equity issuance announcements elicit a negative reaction, but no significant reaction is observed with respect to new debt issues. A cross-sectional analysis...

Two explanations are commonly offered for the large number of recent IPOs by Internet firms: that they are rushing to go public when Internet stock prices are irrationally high, and that they are trying to grab market share in an industry with large economies of scale. We examine the actions of...

This study examines the market's reaction to foreign divestitures and explains why reactions vary across firms. A significant positive reaction is observed, which is similar in magniture to that observed for a matched control sample of domestic divestitures. The size of the reaction is...

This paper examines the returns to investment strategies based on the interactions between value-to-market indicators and corporate financing transactions that increase or decrease the firm's outstanding equity, i.e., equity issues and repurchases. Portfolio-level analyses and firm-level...