In this report, the tax effects of leveraged buyouts (LBOs) based on the current tax law and data from LBOs during the period 1979 through 1985 are examined. The analysis challenges the argument that LBOs result in net losses of tax revenues to the U.S. Treasury. Five ways are shown in which...

PDF file of slides for Keynote Speech at the RFS-IU Conference on The Causes and Consequences of Recent Financial Market Bubbles, Aug. 12-13, 2005, Bloomington, INNote: SSRN is experimenting with enabling the distribution of different types of files: slides, spreadsheets, video, etc. This is the...

Arbitragers provide important productive services to investors, and the supply of these services is threatened by the outpouring of self-righteous protests and legal actions in the wake of the SEC prosecution of insider trading cases. Current law, as interpreted by the SEC, fails to recognize...

This paper enlarges upon some recent work regarding the appropriate discount rate for public projects and, in particular, shows more fully why risk should enter into the calculation. Indeed, we argue that efficient allocation of risk bearing is usually more difficult for government projects than...

This essay reviews the development of modern capital market theory (i.e., general equilibrium models of the prices of capital assets under conditions of uncertainty) and the empirical evidence bearing on this theory. There are two main approaches to this problem; the mean-variance models...

This paper is a review of the foundations and current state of mean-variance capital market theory. This work, whose foundations lie in the mean-variance portfolio model of Markowitz, deals with the determination of the prices of capital assets under conditions of uncertainty. The Sharpe-Lintner...

Shareholders, who are the most important constituency of the modern corporation because they bear its residual risk, benefit most directly from acquisitions because of the increase in the value of target company shares. Many current criticisms directed at takeover activity are wrong or based on...

The purpose of this paper is to examine the problem faced by the portfolio manager attempting to optimally incorporate forecasts of future market returns into his portfolio. Given the solution to this problem we then shall focus our attention on the problem involved in measuring a portfolio...

Through dozens of studies, economists have accumulated considerable evidence and knowledge on the effects of the takeover market. Most of the earlier work is well summarized elsewhere (Jensen and Ruback (1983); Jensen (1984); Jarrell, Brickley and Netter (1988)). Here, I focus on current aspects...