This thesis presents two essays in Corporate Finance. In the first essay, I use the August 2007 crisis episode to gauge the effect of financial contracting on real firm behavior. I identify heterogeneity in financial contracting at the onset of the crisis by exploiting ex-ante variation in...

In the first chapter of this dissertation, entitled “Signaling and Value Creation in Mergers,” I analyze the acquirers in both withdrawn and completed merger deals to disentangle the effects of signaling from those of target valuation and expected synergies. Completed stock (cash) acquirers...

The goal of any investor is to obtain the highest possible return for his or her money. However for years, the debate has continued; stocks, bonds, mutual funds; which of these financial instruments will produce the greatest gain to give the investor the highest profit? Historically, stocks have...

This paper examines time-series patterns of external financing decisions and shows that publicly traded U.S, firms fund a much larger proportion of their financing deficit with external equity when the cost of equity capital is low. The historical values of the cost of equity capital have...

With the appropriate framework to shape financial knowledge, the management accounting function should become an organization's principal decision-support platform. The framework consists of six levels of financial knowledge, and the word "financial" is most operative here. The Level 1 knowledge...

We provide an empirical support for theories of lender specialization using the recently developed market for Debtor-in-Possession (DIP) financing. The legal environment in which DIP financing operates represents a natural laboratory for testing determinants of lending specialization (e.g....

Value-based management systems focus on wealth and the wealth creation process and promote the generation of value for the shareholders. A valuation model for the firm is extended analytically to focus explicitly on profitability, growth, and capital intensity as drivers of the value of the...

Using data from 944 public companies in 2006, I examine how a firm''s propensity to pay dividends is related to (i) board independence and (ii) independent directors'' tenure, number of board seats (busy) and equity incentive compensation. After controlling for the effects of traditional...

We conduct an experiment to examine how lending decisions are affected by lender perceptions of reporting and governance quality. We perform a set of experiments to determine whether lenders are sensitive to the quality of governance as measured by board composition along multiple dimensions,...

We examine internal auditors' fraud risk decisions in response to variations in audit committee quality and management performance incentives. Using an experimental approach, we find that internal auditors serving in a either a self-assessment role or a due diligence role were sensitive to...