Armen Hovakimian

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I use the Business Information Tracking Series (BITS), a new census database that covers the whole U.S. economy at the establishment level, to examine whether the finding of a diversification discount is an artifact of segment data. BITS data allow me to construct business units that are more consistently and objectively defined than segments, and thus more(More)
We examine whether market and operating performance affect corporate financing behavior because they are related to target leverage. Our focus on firms that issue both debt and equity enhances our ability to draw inferences. Consistent with dynamic tradeoff theories, dual issuers offset the deviation from the target resulting from accumulation of earnings(More)
We examine several possible explanations for why acquisitions of privately held firms are more profitable than acquisitions of public companies. Examining the effects of acquisition financing and venture capital (VC) backing, we document that VC-backing leads to significantly higher acquirer announcement returns, even after controlling for differences in(More)
We investigate the pricing of risk-neutral skewness in the stock options market by creating skewness assets comprised of two option positions (one long and one short) and a position in the underlying stock. The assets are created such that exposure to changes in the underlying stock price (delta) and exposure to changes in implied volatility (vega) are(More)
Contrary to Baker and Wurgler (2002), we find that the importance of historical average market-to-book in leverage regressions is not due to past equity market timing. We find that though equity transactions may be timed to equity market conditions, they do not have significant long-lasting effects on capital structure. Debt transactions exhibit timing(More)
Managers choose credit rating targets by trading off the benefits associated with a high rating against the higher cost of capital associated with the additional equity required to maintain the high rating. We find that small and risky firms tend to target lower ratings, whereas firms with high growth opportunities tend to target higher ratings. In(More)
Extensive research exists in financial economics relating taxes and stock returns. Personal taxation of dividends at a rate higher than capital gains and corporate taxation at a lower effective rate has spawned an ocean of work. We present a synthesis of various theoretical, empirical, and regulatory issues and guide the reader through a maze of conflicting(More)
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