In this paper I review the definition of weighted average cost of capital and derive the discount coefficient of the firm's cash flows which preserves linearity of the present value function within each discounting period, i.e. in each discounting period the sum of the present value of each cash...

Studies of the incentives behind the expropriation of minority shareholders of publicly listed firms by their controlling shareholders focus on the publicly listed firm's performance or characteristics and treat the controlling shareholder as a black box. In this paper, we examine when and why...

This paper examines the liquidity, Tobin's Q, and cost of equity effects from voluntary and mandatory IFRS adoption. In contrast to prior work, we focus on the firm level heterogeneity in the economic consequences, recognising that the level of uncertainty avoidance (UAI) in a country will...

Reverse mergers are an alternative method to IPOs for going public and announcement day price reaction to reverse mergers is comparable to the initial day price reaction to IPOs. Most of the academic theories developed thus far to explain the market's reaction to IPOs, however, are not...

In this short expository note I provide an overview of leveraged buy-out transactions (“LBOs”). I show in detail how an LBO transaction is structured and financed, as well as the typical return profile. I also provide a sample transaction accompanied by financial projections, debt repayment...

We simultaneously analyze two mechanisms of the managerial labor market (CEO turnover and remuneration schemes) in two different regulatory regimes, namely before and after the sweeping governance reforms adopted in the UK in the 1990s. We employ sample selection models to examine firms in a...

We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The market timing and catering approach views managerial financing and investment decisions as rational managerial responses to securities mispricing. The managerial biases approach...

The book proposes an original contribution to the economics and finance literature by developing the foundations of corporate finance. It also covers in detail various corporate governance issues faced by organizations. The common treatment of corporate finance and corporate governance started...

We investigate whether the concentration of power in the hands of individuals characterized as business leaders influences the variability of corporate performance. We do so by proposing an original method to estimate the concentration of power that takes into account both the individual...

In this paper, we examine the differences in information asymmetry and financing patterns and a generalized version of the trade-off theory across countries with different institutional environments. We find that firms in Civil law countries have higher information asymmetry, rely more on...