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Corporate Finance

Selected Works

2006

Articles 1 - 15 of 15

Full-Text Articles in Business

Information Asymmetry And The Cost Of Going Public, Steven Dolvin Oct 2006

Information Asymmetry And The Cost Of Going Public, Steven Dolvin

Steven D. Dolvin

No abstract provided.

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The Impact Of Bank Venture Capital On Initial Public Offerings, Steven Dolvin Sep 2006

The Impact Of Bank Venture Capital On Initial Public Offerings, Steven Dolvin

Steven D. Dolvin

No abstract provided.

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Inflation Monitor, Muhammad Arby, Fida Hussain, Safdar Khan May 2006

Inflation Monitor, Muhammad Arby, Fida Hussain, Safdar Khan

Safdar Khan

Extract:
Although inflationary pressures persisted in the economy for the second year in a row, the headline inflation fell to 7.6 percent year-on-year in June 2006 that was 1 percentage point less than inflation in corresponding month last year.1 The inflation containment was more visible in the last six months of FY06 as compared to first six months (Jul 05 to Dec 05): the average CPI inflation during the first half of the year was 8.4 percent which declined to 7.4 percent in the second half primarily due to fall in food inflation. Inflation measured by sensitive price indicator also …

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Dynamics Of Energy Consumption, Safdar Khan Dec 2005

Dynamics Of Energy Consumption, Safdar Khan

Safdar Khan

Extract:
Dynamics of Energy Consumption Pakistan has been facing severe imbalances in energy demand and supply for the last couple of decades. During early 1980s domestic supply of energy was fulfilling almost 86 percent of total domestic energy demand; a gap of 14 percent was being filled by imports. However, the demand – supply gap started increasing since then and reached to almost 47 percent by the year 2000 (see Figure S2.1).

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Closed End Fund Discounts As Sentiment Indicies, Thomas Berry Dec 2005

Closed End Fund Discounts As Sentiment Indicies, Thomas Berry

Thomas D Berry

No abstract provided.

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The Disposition Effect And Individual Investor Decisions: The Role Of Regret And Counterfactual Alternatives, Thomas Berry, Suzanne Fogel Dec 2005

The Disposition Effect And Individual Investor Decisions: The Role Of Regret And Counterfactual Alternatives, Thomas Berry, Suzanne Fogel

Thomas D Berry

Recent studies have documented a strong tendency for individual investors to delay realizing capital losses, while realizing gains prematurely (Odean [1996], Shefrin and Statman [1985], Weber and Camerer [1996]). This tendency has been termed the “disposition effect.” The disposition effect is inconsistent with normative approaches to stock sales, such as those based on tax losses (see, for example, Constantinides [1983]). We surveyed individual investors, and found that more respondents reported regret about holding on to a losing stock too long than about selling a winning stock too soon. This finding suggests that individual investors are consistently engaging in behavior that …

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Ipo Long-Run Returns: A New Approach, Steven Dolvin, Mark Pyles Dec 2005

Ipo Long-Run Returns: A New Approach, Steven Dolvin, Mark Pyles

Steven D. Dolvin

The long-run underperformance of initial public offerings (IPOs) is heavily documented; however, researchers have been unable to consistently determine which IPO characteristics affect the level of underperformance. Our main contribution is to examine this relation using a unique, alternative approach that concentrates on pairs of IPOs issued on the same day, thereby avoiding many of the biases (e.g., overlapping time periods) embedded in previous studies. Over the period 1986 to 2000 we find that issues with lower initial returns, higher quality underwriters, and/or high technology status tend to have higher long-run returns. Note: Link is to the article on the …

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Venture Capitalist Quality And Ipo Certification, Steven Dolvin, Mark Pyles Dec 2005

Venture Capitalist Quality And Ipo Certification, Steven Dolvin, Mark Pyles

Steven D. Dolvin

The opportunity cost of going public is directly related to the level of information asymmetry associated with the issuing firm. Independent third parties, such as underwriters and venture capitalists, are believed to mitigate this asymmetry through certification, thereby reducing this cost. Existing studies illustrate that higher quality underwriters provide increased certification value; however, current research is essentially mute with regard to the effect of venture capitalist quality. We fill this gap, finding that higher quality venture capitalists also provide incremental certification value relative to those of lower quality. Additionally, we suggest that the most appropriate measure of venture capitalist quality …

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Penny Stock Ipos, Steven Dolvin, Daniel Bradley, John Cooney, Jr., Bradford Jordan Dec 2005

Penny Stock Ipos, Steven Dolvin, Daniel Bradley, John Cooney, Jr., Bradford Jordan

Steven D. Dolvin

We examine underpricing, long-run returns, lockup periods, and gross spreads for penny stock IPOs over the 1990-1998 period. We find that penny stock IPOs have higher initial returns than ordinary IPOs, but significantly worse long-run underperformance. We also find that penny stock IPOs have longer lockup periods and larger gross spreads. To explore the effect of potential market manipulation, we examine IPOs led by a group of underwriters that were the subject of SEC enforcement actions and/or other penalties. Penny stock issues led by these banks are particularly underpriced and underperform ordinary IPOs led by other underwriters. Note: Link is …

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Stock Splits And Options: An Empirical Study, Sheryl-Ann Stephen Dec 2005

Stock Splits And Options: An Empirical Study, Sheryl-Ann Stephen

Sheryl-Ann K. Stephen

No abstract provided.

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Large Investors, Price Manipulation, And Market Breakdown -- Anatomy Of Market Corners, Lubomir Litov, Franklin Allen, Jianping Mei Dec 2005

Large Investors, Price Manipulation, And Market Breakdown -- Anatomy Of Market Corners, Lubomir Litov, Franklin Allen, Jianping Mei

Lubomir P. Litov

No abstract provided.

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Macro Determinants Of Total Factor Productivity In Pakistan, Safdar Khan Dec 2005

Macro Determinants Of Total Factor Productivity In Pakistan, Safdar Khan

Safdar Khan

No abstract provided.

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Do Underwriters Create Value For Issuers By Subjectively Determining Offer Prices?, Steven Dolvin Dec 2005

Do Underwriters Create Value For Issuers By Subjectively Determining Offer Prices?, Steven Dolvin

Steven D. Dolvin

Many existing theories attempt to explain initial public offering (IPO) underpricing by suggesting that underwriters purposefully set offer prices below market value. These theories implicitly assume that underwriters have perfect foresight and can, with complete accuracy, place a value on issuing firms. This chapter evaluates this assumption by comparing offer prices set by underwriters to prices from three objective, valuation-based approaches. Relative to these estimates, the offer prices chosen by underwriters result in lower levels of underpricing, suggesting that the prices underwriters select are actually value creating for issuing firms in that they reduce the opportunity cost of issuance. Within …

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Lending Relationships In Line-Of-Credit And Nonline-Of-Credit Loans: Evidence From Collateral Use In Small Business, Atreya Chakraborty Dec 2005

Lending Relationships In Line-Of-Credit And Nonline-Of-Credit Loans: Evidence From Collateral Use In Small Business, Atreya Chakraborty

Atreya Chakraborty

Lender–borrower relationships facilitate monitoring in small business loans. We investigate how the duration and scope of the bank–borrower relationship affect the decision to secure line-of-credit and nonline-of-credit loans. We find that the likelihood of collateralizing a line of credit decreases with the length of the bank–borrower relationship. For nonline-of-credit loans, however, the incidence of collateral pledge decreases with the number of lender-provided financial services used by the borrower. Our finding indicates that the mechanism through which banks obtain private information depends on the type of the loan. Pooling across loan types may dilute the impact of both the duration and …

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Shareholders, Unicorns And Stilts: An Analysis Of Shareholder Property Rights, Benedict Sheehy Dec 2005

Shareholders, Unicorns And Stilts: An Analysis Of Shareholder Property Rights, Benedict Sheehy

Benedict Sheehy

Abstract: Shareholders rights advocates argue that shareholders have the right to control the corporation. This article examines the basis for the claims. It begins with an analysis of rights, then moves to an analysis of legal rights, which is followed by an analysis of property rights as a species of legal rights. The article then examines the historical context, rationale and development of shareholder rights which leads to the analysis of current shareholders’ rights. The article concludes with some comments and suggestions concerning future development of corporate governance thinking.

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