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...

Conglomerate discounts or premia are derived by comparing market values of conglomerates with the market values of a matched portfolio of stand alone firms (the imputed value of the conglomerates). Usually this comparison is based on firm values. We show that in this case conglomerate discounts...

We study the certification role of fairness opinions in corporate transactions in a simple non-cooperative setting with asymmetric information and possibly misaligned managerial incentives, and discuss the effect of different regulatory scenarios. Specifically, we compare three settings: one in...

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...

If a bidder launches a takeover offer for a listed company being part of a stock market index, then index funds and exchange traded funds (ETF) as shareholders of this company cannot easily tender their shares without losing track of the index. This paper analyzes the impact of index fund and...

This paper analyzes the combined effect of inflation and taxes on firm value, taking real growth of the firm's investment opportunities into account. Based on a simple model of the firm, our results highlight a hitherto neglected effect of real growth upon firm value. We find real growth,...

This paper provides causal evidence on the effect of ownership structure on firm value and on the impact of large tax incentives on the divestiture decision of equity blockholders by exploiting a quasi-experimental policy change in Germany. The 2000 Tax Reduction Act repealed corporate...

German Abstract: Der Beitrag vergleicht zwei unterschiedliche Konzepte der Unternehmensbewertung von Banken: ein Controlling-basiertes Konzept, bei dem die Bank in drei Bereiche aufgeteilt wird, die separat bewertet werden und das Standard DCF Flow to Equity Verfahren. Das Controlling-basierte...

We analyze corporate financial policies in leveraged buyouts (LBOs) in the presence of default risk. Our model captures the LBO-specific stepwise debt reduction, either with predetermined or cash-flow dependent (cash sweep) principal payments, and thus allows for dynamic redemption. These...

Koziol (2014) derives a simple adjusted WACC equation for firm valuation that takes default probability, possible loss of future tax savings, and the potential costs of financial distress into account. In this note we show that the derivation of the adjusted formula rests on an assumption that,...