We examine whether M&A transactions between firms sharing a common lender differ in important ways from those without common lenders. Consistent with the idea that banks serve a positive matchmaking role, we find higher abnormal announcement returns for deals in which the bidder and target share...

The present study aimed to document the effects of financial constraints on the negative relationship between cash flow and external funds,a phenomenon associated with the Pecking Order Theory. This theory suggests that companies subject to more expensive external funds (financially constrained...

This paper exploits shocks to the value of real estate collateral to study how exogenous changes in firms' external financing capacity affect their competitive performance and industry dynamics. Firms with appreciating collateral tend to gain market share and differentiate themselves from...

This paper aims to shed light on the alleged contradiction between the observed conglomerate discount and a value creating effect of diversification itself. For this reason, we apply endogenous switching regressions on a sample of 51,878 US-firm years recorded over the years 1992-2012 in order...

Distressed firm valuation is a very complicated subject that has involved corporate finance literature and practice since a long time. Despite the topic's relevance, contributions have been few and confined to stating only critical issues and proposing rather abstract solutions, seldom leading...

This paper analyzes how ownership concentration and managerial incentives influences bank risk for a large sample of US banks over the period 1997-2007. Using 2SLS simultaneous equations models, we show that ownership concentration has a positive total effect on bank risk. This is the result of...

We show that large public companies in the United States change the assumptions of the benefit formulas of the defined benefits pension plans for their top executives in anticipation of plan freezes and executive retirements. In particular, on average top executives receive a boost in annual...

We examine cash holdings and leverage levels of German listed (non-financial and non-utility) firms. We document a secular increase in cash ratios over the last twenty years (1992–2011), reducing the net debt book leverage ratio for the average sample firm close to zero. Using pre-diction...

Terminal or continuing value (CV) is a key element in calculating the value of firm capital in any income-based valuation model. This paper focuses on calculating CV in the context of a firm operating as a going concern, highlighting some of the problems associated with the treatment of growth...