A number of studies claim that aggregate managerial decision variables, such as aggregate equity issuance, have power to predict stock or bond market returns. Recent research argues that these results may be driven by an aggregate time-series version of Schultz s (2003) pseudo market timing...

Foreign direct investment offers a rich laboratory in which to study the broader economic effects of securities market mispricing. We outline and test two mispricing-based theories of FDI. The quot;cheap assetsquot; or fire-sale theory views FDI inflows as the purchase of undervalued host...

We investigate the causes of time-series fluctuations in the propensity to pay dividends, including the post-1978 decline documented by Fama and French (2001). We consider explanations based on fluctuations in dividend clienteles, agency problems, information asymmetries, executive stock...

Classical models predict that the division of stock returns into dividends and capital appreciation does not affect investor consumption patterns, while mental accounting and other economic frictions predict that investors have a higher propensity to consume from stock returns in the form of...

We document that U.S. government bonds comove more strongly with acirc;not;Sbond-like stocksacirc;not;?acirc;not; stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor distressed. This pattern may be caused by common shocks to real cash flows,...

We develop a theory in which the decision to pay dividends is driven by investor demand.Managers cater to investors by paying dividends when investors put a stock price premium on payers and not paying when investors prefer non payers. To test this prediction, we construct four time series...

We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low-price firms, managers will maintain share prices at lower levels, and vice-versa. Using measures of time-varying catering incentives based on valuation ratios,...

SUBJECT AREAS: Bids, Board of directors, Capital markets, Corporate governance, Financial strategy, Mergers amp; Acquisitions, Takeovers, Valuation.MCI's board of directors is considering competing bids from Verizon and Qwest. Qwest, a smaller company with a weaker balance sheet, is offering...

SUBJECT AREAS: Behavioral finance, Convertible securities, Dividends, Equity capital, Financial strategy, Financing, Preferred stock, Telecommunications.Corning, with large investments in fiber optic technology, was hit particularly hard by the collapse of the telecommunications industry in...

SUBJECT AREAS: Banking, Capital markets, Capital structure, Convertible bonds, Financial strategy, Valuation.Howard Atkins, the chief financial officer of Wells Fargo, is considering issuing $3 billion in convertible debt. With an investment-grade credit rating, Wells Fargo is not the typical...