This paper investigates the development of earnings quality for a sample of 5,817 firm years during the period between 1997 and 2006 using seven different measures (accounting- and market-based). As a result, overall earnings quality of German firms improves over time. However, the measures of...

We empirically investigate the impact of diversification on the likelihood of being acquired. Our analysis is based on more than 24,000 firm years from all regions for the period between 2001 and 2008. We find that conglomerates are significantly less likely to be acquired and bid premiums paid...

We empirically investigate the impact of diversification on a special form of corporate investment -- corporate acquisitions. Our analysis is based on more than 30,000 firm years in a worldwide sample from 2001 to 2008. We find that conglomerates make significantly less acquisitions than stand...

The terminal value generally reflects a substantial portion of a firm's market value. Stable growth models are usually used to estimate terminal values. We use a simple model of a firm to derive a valuation function for the terminal value in the presence of inflation. Our model reveals that...

In this paper we aim to verify the existence of costs of financial distress (cfd) for a sample of German CDAX firms using an ex-post approach originally due to Opler/Titman (1994). In contrast to this US-based study we do not find a significant interaction between high leverage and distress for...

This note draws on an important paper in venture capital financing theory. BERGLOuml;F (1994) stressed the important role of exit control and incorporated that issue in a model for optimal venture capital contract design. One major result of this work is that convertible debt strictly dominates...

In his recent article quot;Valuation with or without personal income taxesquot; Richter analyzes the impact of introducing income taxes into the calculus of corporate valuation. His major result is that, if correctly specifying the model, the income tax rate is only of minor importance for...

Based on an example Loffler claims in his recent paper quot;Miles-Ezzell's WACC Approach Yields Arbitragequot;, that the application of the Miles/Ezzell-WACC may offer arbitrage opportunities. He concludes that the Miles/Ezzell-WACC is not applicable without restrictions. We discuss the example...

Cash holdings obviously play an important role in financial management of corporations: the largest firms in the world held 1.5 trillion USD in cash and marketable securities in 1998. Finance theory however has not dealt with this subject in detail until the mid 90's. Especially concerning the...

German Abstract: Im Rahmen der Unternehmensbewertung wird für die Ableitung der Eigenkapitalkosten von nicht börsennotierten Unternehmen die Anwendung von Branchen-Betas empfohlen. Wegen der Abhängigkeit des Beta-Faktors von der Kapitalstruktur ist eine Anpassung für ggf. vorhandene...