This paper presents a two-period model in which dividends act as a signal of the stability of the firm's future cash flows. It is demonstrated that firms with more stable future cash flows pay a higher dividend. Dividends are a credible signal because the promise of a higher dividend, ceteris...

In this paper the choice of risky debt maturity structure is analyzed in a sequential game framework. The focus is on the set of viable equilibria when there are not transaction costs associated with the choice of debt maturity structure. It is shown that when changes in firm value are...

This paper investigates the effect of share repurchase through transferable put rights (TPRs) on shareholder wealth and corporate control. Transferable put rights make the put option, which is implicit in a tender offer, marketable. Shareholders who do not tender their shares increase their...

In this article we attempt to determine the impact of a defendant's strategic choice of trial mode on the judicial process. In a sequential signalling game setting, we model a criminal trial using varying assumptions regarding the sophistication of the agents, while maintaining the assumption...

In this article we model the financing decisions of a firm as a sequential signaling game. We prove that, when insiders have perfect information regarding the firm's future case flows, the application of 'refinements' to the set of admissible equilibria leads to the dominance of debt over equity...

This study reviews papers from the Eastern Finance Association's Symposium on Corporate Finance, Incentives, and Strategy. I identify the common themes underlying these papers and place the studies in the broader context of contemporary academic finance research. Further, I discuss new...

Securities trading has generated some of the most sensational scandals in the popular business press. In one of the most publicized cases of insider trading, in the late 1980s Michael R. Milken and Ivan F. Boesky were sentenced to stiff prison terms and payment of enormous damage assessments and...

This article features a review of the book "The Theory of Corporate Finance" by Michael J. Brennan.

We model long-run firm performance, management compensation, and corporate governance in a dynamic, nonstationary world. Many features of governance and compensation that have caused consternation among commentators arise naturally in this dynamic setting, even though boards are rational and...

Short-term financial claims held by uninformed outside investors impose a tax on insider opportunism by diluting the ownership stake of opportunistic owner-managers. By thus limiting managerial opportunism, short-term financing increases firm value and social welfare. When given a choice,...