Financial Management articles from March 1998

Financial Management archives from March 1998

What does the market learn from stock offering revisions?
March 22, 1998... Financing decisions are usually thought to reveal information about a firm's future cash flows that market participants do not have. The most widely cited papers to draw this inference are Miller and Rock (1985) and Myers and Majluf (1984). These...

Optimism biases among brokerage and non-brokerage firms' equity recommendations: agency costs in the investment industry.
March 22, 1998... This paper studies the effect agency costs in the investment industry have on the level and the performance of analysts' investment recommendations. We compiled a sample of 15,653 recommendations on 1,257 corporations for which each corporation...

Nonstandard-settlement transactions.
March 22, 1998... Most equity trades in the United States settle in the "regular way," three business days after the trade.(1) A small number of trades, however, settle at other times and are identified as "nonstandard-settlement" trades. So-called "cash" trades...

The effect of bank debt on optimal capital structure.
March 22, 1998... In most capital structure models, an optimal debt level is determined by weighing various leverage-related costs against leverage-related benefits. Several leverage-related costs, including suboptimal investment incentives, monitoring and bonding...

Valuing long-term commodity assets.
March 22, 1998... The application of option concepts to value real assets has been an important growth area in the theory and the practice of finance. These methods have been especially successful in the valuation of natural resource investments, such as copper...

Agency costs of corporate risk management.
March 22, 1998... Corporate managers have begun to embrace the concept of risk management vigorously. Some surveys indicate that 60% to 80% of large US firms have some sort of financial risk management policies in place.(1) The adoption of corporate risk...