We have theoretically developed New Venture Capital Investing Decision Making Mechanism (NVCIDMM) for joint evaluation of the probability of success of business plans and proposing management teams. Using the efficient market theory we prove that the proposed mechanism is better than the...

This study explores the strategic interaction between large institutional investors and firms that issue put options written on their own stock. The firms experience large positive abnormal annual returns after they sell put options. The vast majority of issued put options expire without being...

Contrary to prior evidence, we show that corporations don't necessarily follow a systematic trade-off between cash holdings and risk management policies and that cash holdings are not a viable substitute for hedging using derivative instruments. Most importantly, we document an economically...

Companies collected billions in premiums from peculiarly structured put options written on their own stock, while almost all of these puts expired worthless quarter after quarter. Buyers of these options, primarily investment banks, lost money as a result. Although these losses might seem...

We model and test the mechanisms through which securities law affects tunneling and tunneling affects firm valuation. In 2002, Bulgaria adopted securities law changes which limit two forms of equity tunneling - dilutive equity offerings and freezeouts. We document that following the change,...

This paper documents that law affects finance in emerging markets through the methods used by controlling shareholders to “tunnel” wealth out of the firm. We find that Bulgarian securities law enabled financial tunneling via dilution and freeze-out tender offers. During the period 1999-...