New accounting standards require ¯rms to expense the costs of option-based compensation (OBC), but the associated valuations o®er many challenges for ¯rms. Earlier research has documented that ¯rms in the U.S. generally underreport the values of OBC by manipulating the inputs used for...

Abstract: This article presents an empirical analysis of board composition and financial performance using a unique sample of Danish listed firms. In 2002, a group consisting of four prominent business leaders formulated Denmark’s own code of good corporate governance, entitled the Nørby...

na

na

This paper suggests a method for determining rigorous upper bounds on approximation errors of numerical solutions to infinite horizon dynamic programming models. Bounds are provided for approximations of the value function and the policy function as well as the derivatives of the value function....

Kinks and jumps in the payoff function of option contracts prevent an effective implementation of higher-order numerical approximation methods. Moreover, the derivatives (the greeks) are not easily determined around such singularities, even with standard lower-order methods. This paper suggests...

na

When identifying relative value opportunities across credit and equity markets, the arbitrageur faces two major problems, namely positions based on model misspeci cation and mismeasured inputs. Using credit default swap data, this paper addresses both concerns in a convergence-type trading...

Does foreign ownership enhance or decrease a firm’s chances of survival? Over the 100 year period 1895-2001 this paper compares the survival of foreign subsidiaries in Denmark to a control sample matched by industry and firm size. We find that foreign-owned companies have higher survival...

This paper investigates the short-run price adjustment around the acquisition announce-ment <p> and the long-run upward bias of the cross-sectional average buy-and-hold returns. <p> We apply the geometric Brownian motion model to decompose the cross-sectional ave r-age <p> long-run returns into mean...</p></p></p>