Financial Management articles from June 1996

Financial Management archives from June 1996

Empirical evidence on the corporate use of derivatives.
June 22, 1996... Theory indicates that hedging can increase firm value by reducing expected taxes, expected costs of financial distress, and other agency costs. Prior research, based on survey data, has found only weak evidence consistent with theory. This...

Executive equity swaps and corporate insider holdings.
June 22, 1996... Managerial shareholding is a topic of persistent interest to economists because of its principal-agent and signaling implications. The theory of ownership structure formalized by Jensen and Meckling (1976) explicitly recognizes the conflicting...

Liquidation costs and accounting data.
June 22, 1996... Asset characteristics play an important role in the theory of optimal capital structure, because the costs of both financial distress and liquidation depend on the nature of a firm,s assets. Theory suggests that equity financing is optimal for...

Debt, performance-based incentives, and firm performance. (includes related article)
June 22, 1996... In contrast to the considerable theoretical literature that deals with aligning the interests of top managers with those of the shareholders, little empirical evidence has been presented to support the idea that changing CEO pay-performance...

The financial performance of low-grade municipal bond funds.
June 22, 1996... Given the size of the U.S. tax-exempt bond market (which includes all the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam), there is surprising little research in this area. As of 1993, the Federal Reserve...

A simple approximation of the value of callable convertible preferred stock. (includes appendix)
June 22, 1996... * Convertible preferred stocks represent a small but significant source of financing. There were 128 such issues listed on the New York Stock Exchange in 1995, with aggregate market value of over $18.5 billion. Conversion features are often...

Why do firms issue convertible debt? (includes appendices)
June 22, 1996... * Convertible debt continues to be a significant source of capital for U.S. corporations. Between 1987 and 1993, over $55 billion in convertible bonds was offered in the domestic market, and many billions more in the Eurodollar market.(1)...