Divestitures create shareholder value by helping firms to optimize their portfolio of assets. However, firms may forego value enhancing divestitures because of agency problems. More specifically, large controlling shareholders may prefer to retain the assets in order to extract private benefits...

Despite the extensive literature on dividend policy, little is known about the relationship between controlling shareholders and the determination of dividend policy, especially in dual class companies. Three potential dividend policy hypotheses are examined. We show that dual class companies...

Debt may help to manage type II corporate agency conflicts because it is easier for controlling shareholders to modify the leverage ratio than to modify their share of capital. A sample of 112 firms listed on the French stock market over the period 1998–2009 is empirically tested. It supports...

For a sample of 267 financially distressed German corporations, I analyze firms’ decision to recapitalize by raising fresh equity. I find evidence consistent with the hypothesis that wealth transfers from owners to creditors, which result from a costly debt overhang present a potential...

In an asymmetric information context with bounded rationality, investors’ loss aversion, mental accounting and buy-and-hold behavior may create opportunities for good-type firms to signal their project quality by choosing lower issuance prices at rights offerings than bad-type firms do. Bad...

Having been introduced in the European Union and in many other countries, the equal opportunity rule is seen as protecting investors in the event of a transfer of control. This rule should be analyzed in a context of appropriation of private benefits between the new controlling shareholders and...

To examine the market response to positive revelations of chief executive officer (CEO) quality, this study focuses on CEOs who withdraw acquisition bids when the price becomes increasingly expensive. Firms that withdrawal for price-related reasons earn higher withdrawal returns than firms that...

[ES] El presente trabajo analiza la relación entre el control familiar y la credibilidad de los resultados contables. Utilizando un panel de datos de empresas españolas cotizadas no financieras para el período 1997-2003, los resultados alcanzados muestran que la credibilidad de la...