Enron plummeted from the 7th largest US firm and six-time winner of Fortune's most innovative firm award to bankruptcy in less than one year. However, management used financial engineering and related-party transactions to disguise Enron's financial condition for over three years. These...

We test the effectiveness of internal corporate governance systems by examining the replacement of founder CEOs at poor performing firms. Managerial entrenchment in these firms is expected to constrain the effectiveness of external corporate governance through the market for corporate control....

In this paper I review the role of securitization in the credit markets and in particular the possible contribution of securitization to the credit crisis of 2007-2008. Based on this review I make the following observations: (i) over the last three decades the originate-to-distribute via...

In this note I lay out an argument supporting the integration of some elements of the corporate social responsibility movement under the goal of maximizing shareholder value. Specifically, this involves honoring the non-contractual promises made by the firm to its customers, suppliers,...

The mistaken notion that the internal rate of return (IRR) and net present value (NPV) contain reinvestment rate assumptions lingers in teaching materials and corporate practice. The fact is that there are no reinvestment rate assumptions built into, or implicit to, the computation and use of...

In this paper, we lay out theoretical shortcomings of the IRR criteria that have largely dropped out of the finance literature. We discuss the problem of multiple IRRs and non-existent IRR under a new light. We also discuss the financial ambiguity that can arise when interpreting the IRR. Then,...

We investigate share price responses to announcements of 93 business alliances using minority equity purchases to bond the agreements. On average, selling firms realize significant increases in share value while buying firms garner neutral share price responses. Analysis of financial performance...

Partner firms to the same joint venture experience sharply different stock price reactions, controlling for differences in size and ownership share in the project. These differences are not explained by different roles in the project or differences in investor anticipation of the annoucement....

The typical payday loan is for less than $500, has a maturity of two weeks, is secured by the borrower's post-dated check or debit authorization, and carries a compound annual rate of interest that can easily exceed 10,000 percent. If you imagined the terms of illegal loan sharking you may not...