Sky Blog
In an earlier post, I discussed my paper arguing that significant changes to the corporate-disclosure regime should trigger review of aspects of the securities-fraud regime. This is because the disclosure regime and the securities-fraud regime go hand-in-hand. So if …
Stock repurchases are popular. Between January 2009 and 2018, S&P 500 firms spent $4.3 trillion to buy back their shares, which is significantly more than these firms spent on dividend payments to their shareholders (Lazonick, Sakinç, and Hopkins, 2020). Stock …
What is the opportunity cost of private benefits of control? Using dollar cost of corporate giving to measure private benefits of control, we show in a recent study that (i) the consumption of private benefits creates a managerial aversion to …
Prices convey information. Hayek (1945) put it this way: Prices “coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.” Stock prices, in particular, matter a …
While the behavior of mutual fund investors is an active field of study within finance, we do not know very much about how these behaviors have changed over time. The simple reason for this is that most studies in this …
In 2013, Michael Dell and his private equity partner, Silver Lake, brought the previously publicly-held Dell Corporation private at a price of $13.75 per share, a price that was approved by Dell’s board and by a 57 percent majority vote …
An important and long-standing question in the economics of information is whether voluntary disclosure leads to full disclosure. A compelling and intuitive argument, often described as the “unraveling” argument (see Milgrom, 1981), suggests that the answer is, yes. In brief, …
A central topic in financial economics is how the allocation of cash flow and control rights among providers of corporate finance should evolve with firm performance. Theoretically, allowing for a transfer of control to creditors when a firm is in …
Dividend payment is a major corporate decision that occurs regularly, involves substantial amounts of money, interacts with all other important company decisions, and has a significant impact on firm value. Our recent study, available here, examines whether financial reporting …