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Full-Text Articles in Finance and Financial Management
Liquidity And Speculative Trading: Evidence From Stock Price Adjustments To Quarterly Earnings Announcements, Hsiao-Fen Yang
Liquidity And Speculative Trading: Evidence From Stock Price Adjustments To Quarterly Earnings Announcements, Hsiao-Fen Yang
LSU Doctoral Dissertations
This dissertation studies whether stock price reactions to quarterly earnings announcements depend on stock liquidity. Baker and Stein (2004) and Scheinkman and Xiong (2003) develop models showing that liquidity can be affected by investor sentiment or speculative trading. With short-sale constraints, liquid stocks have more trading from optimistic, overconfident investors and tend to be overvalued. In this study, we hypothesize that if a liquid stock is overpriced due to intensive speculative trading, the overpricing should be corrected partially or fully after quarterly earnings announcements which convey the information about the fundamental value of stocks and synchronize investors' adjustment to mispricing. …
Managerial Ability And The Valuation Of Executive Stock Options, Tung-Hsiao Yang
Managerial Ability And The Valuation Of Executive Stock Options, Tung-Hsiao Yang
LSU Doctoral Dissertations
The executive compensation literature argues that executives generally value stock options at less than market value because of suboptimal ownership and risk aversion. Implicit in this finding is the assumption that executives are, like shareholders, price takers. That is, they have no ability to influence the outcomes of the firm’s investments. Clearly, executives do have the ability to influence these outcomes, because that is the purpose of granting them the options. In this paper, we develop a model in which managers can exert effort and alter the distribution of the returns from the firm’s investments. We find that when executives …