This paper investigates the impact of the seller's tax liability on the price paid in hospital acquisitions. Lock-in theory predicts that for a given asset, asset holders with larger tax liabilities demand a higher price to compensate for income tax liabilities generated on the sale. We apply...

The theory of tax clienteles for dividend policies predicts that tax-exempt/tax-deferred and corporate investors will increase their ownership of the equity of firms that initiate a cash dividend as these investors purchase shares of stock that are being sold by individual investors for whom...

This paper analyzes tax and non-tax determinants of corporate acquisition structure for 340 acquisitions involving public U.S. acquirers and targets during 1985-1988. The results indicate that the acquiring firm's tax and non-tax characteristics significantly affect transaction structure, but...

We investigate the backdating of stock option exercises. Before SOX, we find evidence that some exercises were backdated to days with low stock prices. Consistent with a tax-based incentive, these suspect exercises are more likely when the personal tax savings from backdating are higher....

This paper examines the extent, if any, to which firms pay additional income taxes on allegedly fraudulent earnings. Our sample consists of firms that restated their financial statements in conjunction with SEC allegations of accounting fraud during the years 1996 to 2002. By examining firms...

Trust preferred stock, first issued in 1993, was engineered to be treated as preferred stock for financial statement purposes and as debt for tax purposes (i.e., payments on trust preferred stock are deductible by the issuer). Our analyses exploit the features of trust preferred stock to shed...

We compare executive equity incentives of firms accused of accounting fraud by the Securities and Exchange Commission (SEC) during the period 1996-2003 to two samples of firms not accused of fraud. We measure equity incentives in a variety of ways and employ a battery of empirical tests. We find...

We analyze a sample of firms accused of fraudulently overstating their earnings and examine the extent, if any, to which they paid additional income taxes on the allegedly fraudulent earnings. Based on restatements of current tax expense adjusted for the tax benefits of stock options, the...

Trust preferred stock, first issued in 1993, was engineered to be treated as preferred stock for financial statement purposes and as debt for tax purposes (i.e., payments on trust preferred stock are deductible by the issuer). Our analyses exploit the features of trust preferred stock to shed...