This paper presents new empirical evidence suggesting that the market evaluates acquisition announcements in the context of the firm's investment policy. When a firm with superior prior internal investment purchases another, market participants often learn from the acquisition, that internal...

In the presence of derivative markets, shareholders can choose their desired mix of cash-flows/votes and vary it through time. We find that the optimal security-voting structure is time varying. Even in the presence of derivatives, most of the time, shareholders optimally choose 1S1V. 1S1V turns...

In the presence of derivative markets, shareholders can choose their desired mix of cash-flows/votes and vary it through time. We find that the optimal security-voting structure is time varying. Even in the presence of derivatives, most of the time, shareholders optimally choose 1S1V. 1S1V turns...

We examine the behavior of call options surrounding the underlying stock's ex-dividend date. The evidence is inconsistent with the predictions of a rational exercise policy; a significant fraction of the open interest remains unexercised, resulting in a windfall gain to option writers. This...

We examine the role of the coupon choice in bond contracts as a signaling mechanism in the presence of information asymmetry between borrowers and lenders about the credit quality of the borrower. Prior literature focuses on the use of maturity as a signaling mechanism. We conjecture that the...