Harry DeAngelo and Jonathan M. Karpoff ♦ Despite cosmetic similarities, the Modigliani-Miller and Coase Theorems provide conceptually distinct insights for analysis of corporate financial policy and governance that are driven by different economic considerations, with neither theorem a special case of…
Michele Fioretti, Victor Saint-Jean, and Simon C. Smith ♦ This paper studies how the timing of NGO activism shapes its effectiveness in influencing corporate behavior. Using data on 2,350 campaigns targeting U.S. firms, we show that campaigns timed at annual…
Andrea Gamba and Alessio Saretto ♦ We show that a structural model incorporating firms’ real options and financial leverage decisions can generate forward-looking equity distributions of various shapes, resulting in highly flexible implied volatility surfaces. In contrast, exogenously specified models…
Yanyan Lin, Chongfeng Wu, Guofu Zhou, and Shunwei Zhu ♦ We introduce a novel decomposition of stock market returns into a permanent component (PC), capturing long-term growth, and a temporary component (TC), reflecting short-term fluctuations. The decomposition is explicit, straightforward…
Nils Lohmeier, Lennart Stitz, and Paul Drecker ♦ Can textual information from firm disclosures help to identify M&A targets? We employ two state-of-the-art transformer neural networks, RoBERTa and Longformer, based on 102,987 annual reports of publicly listed US firms to…
Paul Brockman, Donglai Ning, and Yukihiro Yasuda ♦ There is considerable disagreement about whether managers conduct share repurchases primarily for the long-term benefits of shareholders or for their own short-term gains. This study addresses this important issue by applying a…
