This paper provides a rationale for the use of convertible securities as the medium of exchange in corporate change-of-control transactions. We argue that convertible securities can resolve the information asymmetry about the bidder’s value while at the same time mitigating the information...

In July 1988, the Federal National Mortgage Association (FNMA) issued $500 million principal amount of 8.70% indexed sinking fund debentures (ISFDs). Five additional issues of ISFDs totaling $3.175 billion principal amount followed over the next 14 months. ISFDs contain an...

The comparable company method of valuation does not account for the value of corporate control. Therefore, the method must be adjusted if it is being used to value a company involved in a change-of-control transaction. We provide two alternative ways to adjust the comparable company method for...

I develop Heath-Jarrow-Morton extensions of the Vasicek and Jamshidian pure-diffusion models, extend these models to incorporate Poisson-Gaussian interest rate jumps, and obtain closed-form models for valuing default-free, zero-coupon bonds and European call and put options on default-free,...

Purpose – The purpose of this paper is to examine the hypothesis that a period of sustained supernormal firm performance (for up to five years before fraud commission) creates financial pressure on actors/agents so they have a propensity to behave fraudulently to keep the good times...

We calculate the expected additional fire protection cost to a city implied by the 1974 amendments to the Fair Labor Standards Act. Under the amendments, if a city chooses not to pay its men who are on duty for more than 24 hours at a time for sleep and meal time, it may exclude up to eight...