Journal of Financial and Quantitative Analysis
Опубликовано на портале: 25-09-2007Fred D. Arditti Journal of Financial and Quantitative Analysis. 1971. Vol. 6. No. 3.
Опубликовано на портале: 14-06-2006Karl V. Lins Journal of Financial and Quantitative Analysis. 2003. Vol. 38. No. 1. P. 159-184.
This paper investigates whether management stock ownership and large non-management blockholder share ownership are related to firm value across a sample of 1433 firms from 18 emerging markets. When a management group's controlling exceed its cash flaw rights, I find that firm values are lower. I also find that large non-management control limits blockholdings are positively related to firm value. Both of these effects are significantly more pronounced in countries with low shareholder protection. One interpretation of these results is that external shareholder protection mechanisms play a role in restraining managerial agency costs and that large non-management blockholders can act as a partial substitute for missing institutional governance mechanisms.
Опубликовано на портале: 12-11-2004Meir Statman Journal of Financial and Quantitative Analysis. 1987. Vol. 22. No. 3. P. 353-363.
We show that a well-diversified portfolio of randomly chosen stocks must include at least 30 stocks for a borrowing investor and 40 stocks for a lending investor. This contradicts the widely accepted notion that the benefits of diversification are virtually exhausted when a portfolio contains approximately 10 stocks. We also contrast our result with the levels of diversification found in studies of individuals' portfolios.
Signaling Managerial Optimism through Stock Dividends and Stock Splits: A Reexamination of the Retained Earnings Hypothesis [статья]
Опубликовано на портале: 20-06-2006Gerald J. Lobo, Dean Crawford, Diana R. Franz Journal of Financial and Quantitative Analysis. 2006. Vol. Forthcoming.
The retained earnings hypothesis predicts that stock distributions accounted for by reducing retained earnings are a more credible signal of managerial optimism than stock distributions that do not reduce retained earnings. This study examines the costs of false signaling that are a necessary precondition for the hypothesis and finds them to be generally very small. The absence of the requisite costs of false signaling calls the validity of the hypothesis into question for most firms. However, prior studies have reported broad-based market evidence consistent with the retained earnings hypothesis. To resolve this apparent inconsistency, this study replicates and extends tests of the retained earnings hypothesis contained in three prior studies. It shows that the findings in support of the retained earnings hypothesis can be attributed to specification and measurement choices that bias the results in favor of the hypothesis. The support for the retained earnings hypothesis is weaker when the sources of the bias are removed. However, some support for the hypothesis remains for a limited set of distributing firms.
The Effect of Forward Markets on the Debt-Equity Mix of Investor Portfolios and the Optimal Capital Structure of Firms. [статья]
Опубликовано на портале: 14-06-2006Sheridan Titman Journal of Financial and Quantitative Analysis. 1985. Vol. 20. No. 1. P. 19-28.
This paper demonstrates that the various market imperfections that have been suggested to explain observed portfolio choices and capital structures can be circumvented if securities (e.g., options) can be traded that simulate forward contracts on stock. It is shown that if the risk-adjusted returns to bondholders exceed the returns to stockholders (to reflect personal tax differences) tax-exempt investors will prefer a combination of these synthetic forward purchases and corporate bonds to purchasing stock directly. They will not, as has been suggested, include stock in their portfolios for diversification purposes when they can alternatively purchase securities that simulate forward contracts. It is also shown that firms that can sell synthetic forward positions on their own stock can essentially guarantee that sufficient funds will be available to meet their bond obligations. This gives firms the opportunity to increase their debt levels without increasing the possibility of bankruptcy and the corresponding administrative and agency costs.
Опубликовано на портале: 21-06-2006Harold Jr. Bierman, K. Chopra, J. Thomas Journal of Financial and Quantitative Analysis. 1975. Vol. 10. No. 1. P. 119-129.
At any point in time a firm must decide both the level of working capital consistent with its productive assets and how to finance these assets. Academic theorists in business administration have traditionally approached decision making of the firm on a segmented rather than on a global basis and have been satisfied with developing suboptimizing decision rules. Thus there has been concern about managing working capital and concern about choosing the optimum capital structure, but traditionally the two decisions have not been made jointly. And even if they were made jointly, decisions would still remain in the working capital area involving inventories, credit granting, and marketable securities. This article is an attempt to interrelate working capital and capital structure decisions with working capital used not only as a buffer to avoid ruin but also to affect sales via changing inventory levels and credit policies. The possibility of ruin introduces a discontinuity that precludes perfect elimination of leverage effects via a market. In this article the acquired working capital serves as a buffer against ruin, as well as a means of increasing earnings, while the debt used to finance the working capital increases the size of the fixed payment obligations, and the cost of debt tends to reduce the total earnings of stockholders.