I define and analyze the agency costs of overvalued equity. They explain the dramatic increase in corporate scandals and value destruction in the last five years; costs that have totaled hundreds of billions of dollars. When a firm’s equity becomes substantially overvalued it sets in motion a...

Risk arbitrage involves the purchase of a target firm's shares on the announcement of a merger or tender offer. These transactions provide a risky profit opportunity when the price of the target is below the risk-adjusted expected value of the final takeover price. This article explores the role...

This paper discusses five common divisional performance measurement methods-cost centers, revenue centers, profit centers, investment centers, and expense centers-and provides the beginnings of a theory that attempts to explain when each of these five methods is likely to be the most efficient....