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Title: ESSAYS ON FINANCIAL MARKETS AND CORPORATE POLICIES.
Creator: Akter, Maimuna, Cumming, Douglas, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description: The recent increase in common ownership makes it imperative to study the impact of common ownership on corporate policies. In this two-essay study, I examine how common owners interact with firms to make decisions and how they moderate the impact of market manipulation on corporate culture. In the first essay, I examine whether firms in the same industry make similar investment and financial policies when their large institutional owners overlap. This relationship is important given the...
Show moreThe recent increase in common ownership makes it imperative to study the impact of common ownership on corporate policies. In this two-essay study, I examine how common owners interact with firms to make decisions and how they moderate the impact of market manipulation on corporate culture. In the first essay, I examine whether firms in the same industry make similar investment and financial policies when their large institutional owners overlap. This relationship is important given the tremendous rise of common institutional owners and their significance on their portfolio firms’ policies. I hypothesize that common institutional owners cause their portfolio firms in the same industry to make similar policies by creating anti-competitive incentives, reducing information asymmetry, and influencing governance.
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Date Issued: 2023
PURL: http://purl.flvc.org/fau/fd/FA00014168
Subject Headings: Finance, Corporations—Finance, Corporate culture
Format: Document (PDF)

Title: ESSAYS ON GOVERNMENT CONTRACTING AND PRIVATE INVESTMENT FIRMS: IMPLICATIONS FOR CORPORATE FINANCE.
Creator: Suleymanov, Masim, Cumming, Douglas, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description: The modern organization is “a nexus of contracts” among various stakeholders. In this two-essay study, I examine how contracts surrounding entrepreneurial firms, namely contracts with the U.S. government agencies as customers and contracts with venture capital (VC) firms as investors, interact. In the first essay, I examine whether and how the ex-post government contracting activity of portfolio companies affects the performance of VC investments. Prior research establishes the impact of...
Show moreThe modern organization is “a nexus of contracts” among various stakeholders. In this two-essay study, I examine how contracts surrounding entrepreneurial firms, namely contracts with the U.S. government agencies as customers and contracts with venture capital (VC) firms as investors, interact. In the first essay, I examine whether and how the ex-post government contracting activity of portfolio companies affects the performance of VC investments. Prior research establishes the impact of government customers on the contractor's operating performance and information quality. I find that government contracting improves the likelihood of successful exits via initial public offering (IPO) or acquisition and reduces the likelihood of a liquidation. I also find that the suppliers’ bargaining power relative to the government moderates the relationship between government contracting and VC investment exits. The increased suppliers’ bargaining power mitigates the positive relationship between government contracting and the likelihood of IPOs. The impact of government contracting on the likelihood of acquisitions and liquidations is more substantial for suppliers with greater bargaining power. The results are robust for reputable and non-reputable VC firms, alternative model specifications, and adjustments for potential endogeneity.
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Date Issued: 2022
PURL: http://purl.flvc.org/fau/fd/FA00013917
Subject Headings: Public contracts, Venture capital, Corporations—Finance
Format: Document (PDF)

Title: On financing with convertible debt over the last two decades.
Creator: Rotaru, Camelia S., Florida Atlantic University, McDaniel, William R.
Abstract/Description: Despite extensive research, the rationale behind firms' decision to issue convertible debt is still unknown. On average, results indicate that the market reacts more negatively to new convertible debt issues of companies with higher cash ratios. Hence, I test whether convertible issuers are companies with limited access to the debt and equity markets. I find that pre-1990 issuers have a propensity to accumulate cash out of their cash flows prior to the convertible debt issue. Moreover, I...
Show moreDespite extensive research, the rationale behind firms' decision to issue convertible debt is still unknown. On average, results indicate that the market reacts more negatively to new convertible debt issues of companies with higher cash ratios. Hence, I test whether convertible issuers are companies with limited access to the debt and equity markets. I find that pre-1990 issuers have a propensity to accumulate cash out of their cash flows prior to the convertible debt issue. Moreover, I provide strong evidence that convertible issuers substitute cash for both short-term debt and non-cash net working capital. I also test the pricing of new convertible debt securities at issue. I use a 100-step trinomial tree and find that convertible bonds are issued at an average discount 4.84 from their fair market value. Although the discount appears to be slightly higher in the pre-1990 period than the post-1990 period, the difference is not statistically significant. I also test for the determinants of the degree of underpricing of new convertible debt securities. I find that longer maturity issues and issues with higher coupon rates are more underpriced in the pre-1990 period. I attribute this finding to the poor stock and bond markets of the early and mid 1980s, which caused investors to become weary about long-term fixed income instruments. I find that longer maturity issues are less underpriced in the post-1990 period. This is probably because the value of the conversion option increases with maturity. Furthermore, it appears that issues with higher coupon rates and lower conversion premiums are less underpriced. I attribute this finding to investors being more informed in the post-1990 period and, therefore, less willing to accept higher conversion premiums. I also show that cash redemptions of convertible debt securities are not associated with a negative market reaction, even though forced conversions result in an abnormal negative return at the time of the announcement. Contrary to previous arguments by Stein (1992) and Moody's, I find no evidence that companies force conversion of their securities in order to avoid future bankruptcy.
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Date Issued: 2005
PURL: http://purl.flvc.org/fau/fd/FADT12129
Subject Headings: Convertible Preferred Stocks, Corporations--Finance, Option (Contract), Convertible Securities
Format: Document (PDF)

Title: The dividend reinvestment plan puzzle: Theoretical and empirical evidence.
Creator: Lyroudi, Katerina., Florida Atlantic University, McDaniel, William R.
Abstract/Description: This study examines the significance and implications of Dividend Reinvestment Plans (DRPs) for the sponsoring company and for the shareholders' wealth from a theoretical and an empirical point of view. It develops a DRP theory, as an extension of dividend and capital structure theories. Furthermore, the study tests empirically several hypotheses related to the market reaction at the announcement of a DRP adoption, to the market reaction at the announcement of a DRP discontinuance and to the...
Show moreThis study examines the significance and implications of Dividend Reinvestment Plans (DRPs) for the sponsoring company and for the shareholders' wealth from a theoretical and an empirical point of view. It develops a DRP theory, as an extension of dividend and capital structure theories. Furthermore, the study tests empirically several hypotheses related to the market reaction at the announcement of a DRP adoption, to the market reaction at the announcement of a DRP discontinuance and to the performance of the company sponsoring a DRP. The results indicated that the market reaction to the announcement of a DRP establishment is favorable on days 1 and 2, significant only for the latter. In the long-run, DRPs create value for the sponsoring firm and its shareholders (as measured by Tobin's Q). The announcement of a DRP termination is followed by a negative market reaction, consistent with the thesis of this study. Finally, several factors such as the DRP type (Type I and Type II plans), the industry of the sponsoring company (utilities and non-utilities), tax legislation, the discount feature and the dividend payout ratio are examined in relation to the market reaction at the announcement of a DRP adoption. The Type II DRPs create more favorable reaction to Type I plans at the announcement of their introduction. There are significant differences between the market reaction at the DRP introduction of utilities and non-utilities. The tax legislation affects corporate dividend policy and DRPs. Finally, the discount feature is not regarded favorably by investors as it was hypothesized, which explains its elimination from many DRPs in the recent years.
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Date Issued: 1993
PURL: http://purl.flvc.org/fcla/dt/12328
Subject Headings: Dividend reinvestment, Corporations--Finance, Investments, Portfolio management
Format: Document (PDF)

Title: Corporate control: The case of partial acquisitions.
Creator: Spencer, Carolyn A., Florida Atlantic University, Madura, Jeff
Abstract/Description: The form of the partial acquisition provides a unique opportunity to analyze the influence the partial acquirer has on the target firm which is not available in full acquisitions. This dissertation investigates how the subsequent decisions of both the partial acquirer and the partially acquired target affect their own stock valuations and the stock valuations of the other firm. Only partial acquisitions of less than 50% were considered so that the effect of corporate control without overt...
Show moreThe form of the partial acquisition provides a unique opportunity to analyze the influence the partial acquirer has on the target firm which is not available in full acquisitions. This dissertation investigates how the subsequent decisions of both the partial acquirer and the partially acquired target affect their own stock valuations and the stock valuations of the other firm. Only partial acquisitions of less than 50% were considered so that the effect of corporate control without overt control could be measured. An event-study methodology is used to measure the stock price reactions of both firms to the announcement of several type of events: (1) acquisition/divestiture strategies, (2) dividend changes and (3) capital structure changes. The observed stock price reactions are then examined cross-sectionally to test whether firm-specific factors of explicit and implicit controls are influential in explaining the stock price reactions. A second goal of this dissertation was to measure the long term valuations of both firms and the combined entity to determine if the form of the partial acquisition is superior to that of a full acquisition. Again, various firm specific factors of explicit and implicit controls are tested cross-sectionally to determine their explanatory power on the long term valuations of both firms. The results of the event studies support the hypotheses that the actions of the partial acquirer do have an effect on the stock valuations of the partially acquired target (and vice versa) without the acquirer possessing a majority ownership position. In addition, several measures of explicit and implicit controls were found to be significant determinants of the short term stock valuations. The long term valuation studies implied that the form of the partial acquisition may not be superior to that of a full acquisition. However, it was determined that certain firm-specific factors (relatedness of the acquirer and target) have a significant effect on the long-term valuations for both firms.
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Date Issued: 1996
PURL: http://purl.flvc.org/fcla/dt/12472
Subject Headings: Consolidation and merger of corporations, Corporations--Finance, Investments
Format: Document (PDF)

Title: The effect of shareholder rights and information asymmetry on option-related repurchase activity.
Creator: Golden, Nan, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for...
Show moreI investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for dividends are stronger when firms have weak shareholder rights and the level of information asymmetry positively influences managerial stock option incentives to repurchase stock. Furthermore, prior research indicates that information asymmetry is positively associated with stock repurchases. I also provide evidence indicating that the relationship between information asymmetry and stock repurchases is stronger when firms have weaker shareholder rights.
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Date Issued: 2015
PURL: http://purl.flvc.org/fau/fd/FA00004373, http://purl.flvc.org/fau/fd/FA00004373
Subject Headings: Corporate governance, Corporations -- Finance, Dividends -- Econometric models, Employee stock options, Investment analysis, Stock options -- Econometric models
Format: Document (PDF)

Title: Two Essays on Media Connections and Corporate Finance Policies.
Creator: Hossain, Md Miran, Javakhadze, David, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: The study examines the effects of executives’ media connection on corporate policies. Extant literature in finance, economics and journalism provide inconclusive evidence in determining whether media works as watchdog to the financial market or whether media facilitates bias through manipulation of corporate news events. I introduce two competing hypotheses that may explain the research question. Information Efficiency Hypothesis predicts that media connected firms mitigate information...
Show moreThe study examines the effects of executives’ media connection on corporate policies. Extant literature in finance, economics and journalism provide inconclusive evidence in determining whether media works as watchdog to the financial market or whether media facilitates bias through manipulation of corporate news events. I introduce two competing hypotheses that may explain the research question. Information Efficiency Hypothesis predicts that media connected firms mitigate information asymmetry among its investors, enjoy better governance, and are less likely to manipulate information on corporate policy choices. Manipulation Hypothesis, in contrary, suggests that firms may strategically utilize media connections to alter the information flow that may paint a tainted picture of the firm’s prospects, thereby facilitating greater misvaluation and devising of opportunistic corporate finance policies. I test these hypotheses on a set of investment policies (mergers outcomes and innovative efficiency) and financing policies (seasoned equity offerings and share repurchases). In the first essay, I find that media connection increases merger announcement return, reduces takeover premium, increases the likelihood of deal completion, although post-merger long term performance exhibit inconclusive results. Also, media connection reduces innovative efficiency and change in innovative efficiency attributable to media connections is harmful for the firm in the long run. Overall, results are consistent with the manipulation hypothesis to some extent though further investigation is required before disregarding the information efficiency effect. In the second essay, results show that media connection increases the likelihood of an SEO event, reduces the announcement period CAR. However, analysis of post SEO long term operating and stock performance show mixed results. For repurchasing firms, media connection increases announcement returns, increases the likelihood of repurchase and the amount repurchased. Media connection also increases the likelihood that repurchase is preferred over dividends as a mode of payout. Post repurchase long term operating and stock performance, however, provide inconsistent results. In general, results are consistent with the manipulation hypothesis though information efficiency hypothesis could not be ruled out entirely.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013070
Subject Headings: Corporations--Finance., Mass media and business., Corporations--Public relations.
Format: Document (PDF)

Title: On the interaction between the investment and financing decision: An extension and empirical test of the Williamson specificity hypothesis.
Creator: Cushing, Woodrow Wilson, Jr., Florida Atlantic University, McCarty, Daniel E.
Abstract/Description: This dissertation has a twofold objective: to extend the Williamson asset specificity hypothesis and to empirically test both the asset specificity hypothesis and the extension. The Williamson asset specificity hypothesis asserts that the financial leverage used by firms is a function of the specificity of the assets owned by the firm when asset specificity is defined as the readiness with which assets can be re-deployed. This results from a governance argument whereby highly specific assets...
Show moreThis dissertation has a twofold objective: to extend the Williamson asset specificity hypothesis and to empirically test both the asset specificity hypothesis and the extension. The Williamson asset specificity hypothesis asserts that the financial leverage used by firms is a function of the specificity of the assets owned by the firm when asset specificity is defined as the readiness with which assets can be re-deployed. This results from a governance argument whereby highly specific assets can only be governed by increased equity participation. This argument is extended with the assertion that increased specificity causes operating leverage to rise and that firms counter this increased operating leverage by decreasing the financial leverage they employ. Liquidation value is employed as a proxy measure for how readily assets can be converted to cash. Data was gathered for a sample of firms who have liquidated and include firms liquidated in bankruptcy and firms liquidated voluntarily. Using these data a model is developed to estimate the liquidation value of any firm. A cross-sectional time-series formulation is employed using data gathered for thirty-six firms over a twenty-two year period. A statistically significant positive relationship was found to exist between the estimated liquidation value and financial leverage which supports the Williamson asset specificity hypothesis. Neither the cross-sectional nor time series behavior of firms provides evidence of a trade-off between interest tax shields and non-debt tax shields. No significant relationship was found to exist between the value of the non-debt tax shield and financial leverage. No evidence was found indicating a relationship between operating leverage of firms and financial leverage. However, evidence was found that firms with higher percentage changes in sales from year to year, lower probabilities of failure, higher levels of financial slack, and lower values for interest tax shields use less financial leverage. Finally, evidence was found indicating that firms employed more financial leverage in the 1980's than in the 1970's.
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Date Issued: 1993
PURL: http://purl.flvc.org/fcla/dt/12343
Subject Headings: Transaction costs, Asset-backed financing, Corporations--Finance--Decision making
Format: Document (PDF)

Title: Two essays on newly public firms.
Creator: Wiggenhorn, Joan, Florida Atlantic University, Madura, Jeff
Abstract/Description: This dissertation examines the stock price behavior of newly public firms following two separate events, acquisition announcements and a large single day price change. For the first essay on overreaction, the changes in both liquidity and information are considered in studying the stock price reaction to a trigger of +/-15%. Over 2,600 events are evaluated for these newly public firms from 1992--2001 with events classified as occurring during either the quiet, lockup or post lockup period....
Show moreThis dissertation examines the stock price behavior of newly public firms following two separate events, acquisition announcements and a large single day price change. For the first essay on overreaction, the changes in both liquidity and information are considered in studying the stock price reaction to a trigger of +/-15%. Over 2,600 events are evaluated for these newly public firms from 1992--2001 with events classified as occurring during either the quiet, lockup or post lockup period. For positive trigger events during the quiet period, a large one-day price change results in a significant underreaction. Positive triggers during the lockup period result in no significant abnormal returns, while a statistically significant overreaction occurs during the post lockup period. For negative triggers, while there are no significant abnormal returns for the reactions in any period, there is nevertheless a statistically significant difference between the reactions during the quiet and the post lockup periods. In addition, the degree of market reaction is found to be significantly different for events with information versus events without information. The second essay examines the stock price reaction when newly public firms make acquisition announcements. The belief is that these firms may experience a more positive reaction due to the firms' smaller size, need for immediate expansion, and increased corporate governance. On the other hand, these firms may lack the expertise to successfully integrate the acquisition targets. The results show that these newly public firms experience significant announcement returns of 2.63%. In general, higher announcement returns are found the smaller the acquirer, the smaller the relative size of the acquisition, and if the target is privately held. While the presence of venture capitalists and top tier underwriters result in lower announcement returns, returns are higher if the acquisition advisor is the same as the original underwriter. The buy and hold abnormal returns calculated using a matched sample are not significant. However, acquisitions with economies of scale for the motive have returns of 15% following one year, while those for economies of scope have -15% and the difference is significant.
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Date Issued: 2003
PURL: http://purl.flvc.org/fau/fd/FADT12063
Subject Headings: Stocks--Prices, Going Public (Securities), Consolidation and Merger of Corporations, Corporations--Finance
Format: Document (PDF)

Title: Agency costs and accounting quality within an all-equity setting: the role of free cash flows and growth opportunities.
Creator: Cabán, David, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I investigate if all-equity firms are a heterogeneous group as it relates to agency costs and accounting quality. All-equity firms are a unique group of firms that choose a “corner solution” as their capital structure. Extant research, supported by well-established theories such as trade-off theory, free cash flow theory, and Jensen’s (1986) control hypothesis, generally conclude that agency conflicts motivate such structure. Research also supports the alternative argument that poor...
Show moreI investigate if all-equity firms are a heterogeneous group as it relates to agency costs and accounting quality. All-equity firms are a unique group of firms that choose a “corner solution” as their capital structure. Extant research, supported by well-established theories such as trade-off theory, free cash flow theory, and Jensen’s (1986) control hypothesis, generally conclude that agency conflicts motivate such structure. Research also supports the alternative argument that poor accounting quality makes debt so prohibitive that such firms are driven to this capital structure. I propose that an all-equity structure is not necessarily symptomatic of agency conflicts and poor accounting quality overall. I investigate if different motivations, within an all-equity setting, reflected by free cash flows and growth opportunities, result in different levels of agency cost and accounting quality. By anchoring on theories that link implicit costs of debt to free cash flow levels and growth opportunities, I hypothesize that free cash flows and growth opportunities are strongly linked to the justification or lack thereof for the pursuit of such strategy. I hypothesize and show that firms in the extremes of the free cash flow to growth rate spectrum exhibit significantly different levels of agency cost and accounting quality within the all-equity setting. These results support my main prediction that there exists agency costs and accounting quality differences within the all-equity setting which are associated with free cash flow levels and growth opportunities and that the pessimistic conclusions for pursuing an all-equity strategy reached by prior research should not be generalized to all such firms.
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Date Issued: 2015
PURL: http://purl.flvc.org/fau/fd/FA00004432, http://purl.flvc.org/fau/fd/FA00004432
Subject Headings: Business enterprises -- Valuation, Cash management, Corporations -- Finance, Corporations -- Growth, Financial risk management, Strategic planning, Venture capital
Format: Document (PDF)

Title: Essays on high-tech acquisitions and divestitures.
Creator: Benou, Georgia., Florida Atlantic University, Madura, Jeff
Abstract/Description: Since the early 1990s there has been a substantial increase both in mergers and acquisitions (M&A) as well as in divestitures of high-tech companies. This dissertation examines the takeover and divestiture activity in high-tech markets in an effort to extend our current knowledge regarding high-tech companies. In that context, various firm characteristics and their relation to firm performance are investigated. Furthermore, an attempt is made to examine the role of investment banks and their...
Show moreSince the early 1990s there has been a substantial increase both in mergers and acquisitions (M&A) as well as in divestitures of high-tech companies. This dissertation examines the takeover and divestiture activity in high-tech markets in an effort to extend our current knowledge regarding high-tech companies. In that context, various firm characteristics and their relation to firm performance are investigated. Furthermore, an attempt is made to examine the role of investment banks and their impact---if any---on shareholder wealth. This study finds that for domestic high-tech acquisitions, the higher the level of the target's R&D expenditures, the lower the bidder's announcement period wealth effects. Furthermore, the more MEDIA attention the tech target receives prior to the acquisition the more favorably investors react to news about the acquisition. This finding is common both for domestic and international tech acquisitions. Findings on the role of investment bank advisors vary across the three studies. Essay 1 shows that high-tech acquisitions advised by top-tier investment banks perform worse upon announcement than acquisitions advised by lower-tier investment banks. In Essay 2 the tier of the investment bank advisor makes a difference only during the difficult and uncertain years of the tech downturn time period. Finally, in Essay 3 it is found that sellers benefit from the presence of an investment bank advising the buyer, suggesting that whenever the buyer uses an investment bank, the assets are divested at a high price. However, it is only during the years following the end of the tech-bubble period that buying-firm shareholders reacted less favorably to acquisitions of high-tech divested assets certified by an investment bank.
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Date Issued: 2004
PURL: http://purl.flvc.org/fau/fd/FADT12101
Subject Headings: Corporate divestiture--United States, Consolidation and merger of corporations--Management, High technology industries--Management, Corporations--Finance
Format: Document (PDF)

Corporations--Finance (5)	+ -
Corporations -- Finance (2)	+ -
Corporations—Finance (2)	+ -
Investments (2)	+ -
Venture capital (2)	+ -

Asset-backed financing (1)	+ -
Business enterprises -- Valuation (1)	+ -
Cash management (1)	+ -
Consolidation and Merger of Corporations (1)	+ -
Consolidation and merger of corporations (1)	+ -
Consolidation and merger of corporations--Management (1)	+ -
Convertible Preferred Stocks (1)	+ -
Convertible Securities (1)	+ -
Corporate culture (1)	+ -
Corporate divestiture--United States (1)	+ -
Corporate governance (1)	+ -
Corporations -- Growth (1)	+ -
Corporations--Finance--Decision making (1)	+ -
Corporations--Finance. (1)	+ -
Corporations--Public relations. (1)	+ -
Dividend reinvestment (1)	+ -
Dividends -- Econometric models (1)	+ -
Employee stock options (1)	+ -
Finance (1)	+ -
Financial risk management (1)	+ -
Going Public (Securities) (1)	+ -
High technology industries--Management (1)	+ -
Investment analysis (1)	+ -
Mass media and business. (1)	+ -
Option (Contract) (1)	+ -

Florida Atlantic University (11)	+ -
College of Business (5)	+ -
Department of Finance (3)	+ -
Madura, Jeff (3)	+ -
Cumming, Douglas (2)	+ -

Javakhadze, David (2)	+ -
Kohlbeck, Mark (2)	+ -
McDaniel, William R. (2)	+ -
School of Accounting (2)	+ -
Akter, Maimuna (1)	+ -
Benou, Georgia. (1)	+ -
Cabán, David (1)	+ -
Cushing, Woodrow Wilson, Jr. (1)	+ -
Golden, Nan (1)	+ -
Hossain, Md Miran (1)	+ -
Lyroudi, Katerina. (1)	+ -
McCarty, Daniel E. (1)	+ -
Rotaru, Camelia S. (1)	+ -
Spencer, Carolyn A. (1)	+ -
Suleymanov, Masim (1)	+ -
Wiggenhorn, Joan (1)	+ -

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