We examine managerial compensation and wealth sensitivities around CEO changes. The average new CEO is incentivized to increase the risk of the firm primarily because he holds significantly less stock than his predecessor, and in fact riskier policy choices are subsequently implemented. Similar...

Financial theory holds that firms can control agency costs through the use of short-term and secured debt. We examine the relation between the use of secured debt and the incentive of the manager to increase the risk of the firm, as measured by vega. We find that firms utilize secured debt to a...

We rank finance journals based on citations between 2003 and 2008 and compare those rankings with how they existed approximately 20 years earlier. Outside of the top four finance journals (Journal of Finance, Journal of Financial Economics, Review of Financial Studies, and Journal of Financial...

We examine the impact of managerial risk exposure on capital structure selection by comparing a sample of 123 all-equity firms to a set of levered firms matched on the basis of industry, market cap and market-to-book assets. Net debt levels decline as CEO wealth sensitivity to stock price...

A warrant call should only elicit a stock price reaction when there are agency costs of managerial discretion, because in this case the gains to shareholders from expropriating the time premium of the warrants may be offset by the losses when managers invest the proceeds in negative NPV...

We examine the long-run stock price and operating performance of companies that withdraw seasoned equity offerings. Firms that withdraw an offering provide an opportunity to examine the long-run impact of the intent to issue shares, independent of any agency problems that might be intensified by...

Bankrupt firms should reorganize if the wealth created by continuing is expected to exceed the wealth that would be created by liquidating. We examine 88 firms that reorganized in Chapter 11 and find that, despite having sub-standard accounting profitability, more than 80% created more wealth by...

Bankrupt firms should reorganize if the wealth created by continuing is expected to exceed the wealth that would be created by liquidating. We examine 88 firms that reorganized in Chapter 11 and find that, despite having sub-standard accounting profitability, more than 80% created more wealth by...

We examine the relation between liquidation costs and capital structure for 88 firms that reorganized under Chapter 11 of the bankruptcy code. Firms in Chapter 11 must disclose information on post-reorganization financial claims and the estimated going concern and liquidation value of the assets...