Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Business
Collusion And Financial Leverage: An Analysis Of The Integrated Mill Steel Industry, Richard Lord, W. Ken Farr
Collusion And Financial Leverage: An Analysis Of The Integrated Mill Steel Industry, Richard Lord, W. Ken Farr
Department of Accounting and Finance Faculty Scholarship and Creative Works
We show that firms can design their capital structure to provide a publicly observable indication of compliance with a collusive agreement. We develop two empirically testable hypotheses based on this argument and test these propositions on data for seven integrated mill steel firms. Our study period covers years when prices were overtly coordinated under the basing point pricing system and after the demise of the system. Empirical tests confirm the hypotheses that leverage is positively related to both price elasticity of demand and the level of convertibles outstanding during the years after the collapse of the basing point pricing system.
Equity Valuation In A Changing Institutional Climate: Evidence From Multinational Utilities, Joann Pinto
Equity Valuation In A Changing Institutional Climate: Evidence From Multinational Utilities, Joann Pinto
Department of Accounting and Finance Faculty Scholarship and Creative Works
The transformation of U.S. utilities from purely domestic to multinational enterprises commenced in 1992 with the passage of The Energy Policy Act (EPAct). In response to the liberalized regulatory climate, 29 U.S. utilities have diversified their holdings through the acquisition of foreign utilities, many of which are located in emerging market countries. This study analyzes the impact of international diversification on the profitability and valuation of U.S.-based multinational utilities during the years 1996-2000. In order to control for the effects of aggregate economic and regulatory changes, purely domestic utilities are also included in the sample. The empirical tests are conducted …