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Event-study methodology under conditions of event-induced variance
We find that when an event causes even minor increases in variance, the most commonly-used methods reject the null hypothesis of zero average abnormal return too frequently when it is true, although they are reasonably powerful when the null is false. Expand
Free Cash Flow and Stockholder Gains in Going Private Transactions
We investigate the source of stockholder gains in going private transactions. We find support for the hypothesis advanced by Jensen that a major source of these gains is the mitigation of agency… Expand
Stock Trading before the Announcement of Tender Offers: Insider Trading or Market Anticipation?
Recent insider trading actions by the government against Dennis Levine, Ivan Boesky, Martin Siegel, and others have influenced the public's perception of mergers and acquisitions activity.' These… Expand
The Returns to Acquiring Firms in Tender Offers: Evidence from Three Decades
M Extensive empirical evidence supports the view that takeovers are beneficial to the shareholders of target firms.I Virtually every study has found that these shareholders receive large premiums,… Expand
Strong Managers, Weak Owners: The Political Roots of American Corporate Finance.
Shark repellents and stock prices: The effects of antitakeover amendments since 1980
Abstract Antitakeover amendments (shark repellents) restrict the transfer of corporate control. On average, the public announcement of antitakeover amendments by 600 firms in the period 1979–1985 has… Expand
Target-firm information asymmetry and acquirer returns
We show that acquirer returns are significantly higher in stock-swap acquisitions of difficult-to-value targets, as measured by R&D intensity and idiosyncratic return volatility. This finding… Expand
Dual-class recapitalizations as antitakeover mechanisms: The recent evidence
Abstract We report evidence on shareholder wealth effects of 94 firms recapitalizing with dual classes of common stock with disparate voting rights. We find significant, negative abnormal stock price… Expand
Determinants of contractual relations between shareholders and bondholders: investment opportunities and restrictive covenants
Abstract We evaluate the costs and benefits of restrictive covenants in bonds issued in 1989 and 1996. Our results indicate that firms with growth opportunities are more likely to seek to preserve… Expand
Managers of Financially Distressed Firms: Villains or Scapegoats?
In this paper, we provide evidence concerning the extent to which managers are to blame when their firms become bankrupt. We study a sample of firms that end up in severe financial distress to… Expand