Financial Management articles from September 1999

Financial Management archives from September 1999

Is Convertible Debt a Substitute for Straight Debt or for Common Equity?
September 22, 1999... This paper examines the ability of the risk-shifting hypothesis and the backdoor-equity hypothesis to explain firms' decisions to issue convertible debt. Using a security choice model that incorporates pre-offer issue, issuer, and macroeconomic...

Stock Splits and Information: The Role of Share Price.
September 22, 1999... Our empirical investigation of announced split factors, split announcement returns, and revisions of analysts' earnings forecasts shows that a firm's past history of stock splits plays a crucial role in both the design and effect of current...

Does the Composition of the Compensation Committee Influence CEO Compensation Practices?
September 22, 1999... This paper examines whether compensation committee composition affects CEO compensation practices. We find that CEOs receive preferential treatment (at shareholders' expense) when insiders are members of the compensation committee. We do not...

Is Share Price Related to Marketability? Evidence from Mutual Fund Share Splits.
September 22, 1999... We examine the "marketability hypothesis," which states that stock splits enhance the attractiveness of shares to investors by restoring prices to a preferred trading range. We examine splits of mutual fund shares because they provide a clean...

Managing Corporate FX Risk: A Value-Maximizing Approach.
September 22, 1999... Minimizing the probability of business disruption is presented as an objective for FX hedging programs. Within this context firms hedge when the benefits, defined as the reduction in the expected costs of business disruption, exceed the...

Financial Management's Success as an Academic Journal.
September 22, 1999... At its inception, Financial Management (FM) had the difficult mission of serving the needs of all members of the Financial Management Association International (FMA), both academic and practitioner. That mission has now changed. FM's revised...

How Legislation Affects Value: The Failure of Credit Card Cap Legislation.
September 22, 1999... We examine the credit card cap bill of November 1991. This legislation took only six business days to be formulated, pass in the Senate, and then die unenacted. We find that banks with high credit card exposure experienced significant negative...

Allocation of Risk Capital in Financial Institutions.
September 22, 1999... The attention devoted to risk management in recent years has mostly focused on risk measurement, whereas the use of such measures in actual decision processes has been unaddressed. This paper focuses on the implementation issues involved with...