We analyze the valuation-tax avoidance relation and find there is, in fact, a market value discount for tax avoidance. We identify several channels for the adverse valuation effects of tax avoidance. Tax-avoiding firms that i) lack foreign income, ii) are financially constrained, and iii) incur...

In a sample of 1,507 US all-public acquisitions from 1985—2014, 5% of acquirers use the same advisor that underwrote the target’s initial public offering. Acquirers who use these informed advisors have acquisition announcement three-day cumulative abnormal returns (CARs) that are 2.048...

Firms that face high ambiguity—Knightian uncertainty—reduce organic investments and increase the likelihood, count, and dollar value of merger and acquisition bids. Conversely, firms that face low ambiguity are likely targets. The probability and speed of deal completion increase in the...

We study the effect of ambiguity — Knightian uncertainty — on payout policy. We find that firm-level ambiguity increases and accelerates payout, via both dividends and share repurchases. This positive effect of ambiguity is distinct from the known negative effect of risk on payout policy....

Using more than 30 million quarterly observations on investment funds, firms, and directors, we show that equity-ownership relationships between funds and directors comove when new firms appoint these directors. Funds follow directors from high operating performance and high valuation firms to...