Accounting earnings are often criticized for being manipulable by managers. However, earnings-based compensation plans are ubiquitous. Our theoretical model evaluates net cash flows, accounting earnings, and stock prices as potential performance measures and shows that earnings are often better...

Corporations uniquely have a tax preference for cash dividends. Nevertheless, dividends do not increase following trades of large-percentage blocks of stock from individuals to corporations. Moreover, although one-third of firms have corporate blockholders, 68% of these firms pay no dividends,...

We examine choices of leverage and debt maturity, focusing on the impact of investment opportunity sets and regulatory environments. Using the mathematics of strategic complementarities, we derive conditions under which firms choose facets of capital structure that re monotonic in their...

We study the effects of changes in bid-ask spreads on the prices and trading volumes of stocks that move from Nasdaq to the NYSE or Amex, and stocks move from Amex to Nasdaq. When stocks move from Nasdaq to an exchange, their spreads typically decrease, but the reduction in spreads is much...

This paper provides additional evidence on the relation between bid-ask spreads and the avoidance of odd-eighth quotes on NASDAQ by examining 472 firms that moved from NASDAQ to the NYSE or Amex. When NASDAQ market makers avoid odd-eighth quotes, bid-ask spreads are large and decline...

We provide an empirical examination of the determinants of corporate debt maturity. Our evidence offers strong support for the contracting-cost hypothesis. Firms that have few growth options are large, or are regulated have more long-term debt in their capital structure. We find little evidence...

We study the effects of changes in bid-ask spreads on the prices and trading volumes of stocks that move from Nasdaq to the NYSE or Amex, and stocks that move from Amex to Nasdaq. When stocks move from Nasdaq to an exchange, their spreads typically decrease, but the reduction in spreads is...

We show that the greater the extent to which a performance measure matches delivered performance, the simpler and more robust are the compensation plans based on it. In some settings stock price changes match delivered performance poorly because they anticipate it. This introduces three problems...

Current theories of capital structure have difficulty explaining the aspects of financing behavior we document. In contrast to the tradeoff theory, seasoned equity offers frequently move firms away from their target leverage ratios. At odds with the pecking-order theory, SEO firms typically are...