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Full-Text Articles in Business
The Effect Of The Options Backdating Scandal On The Stock-Price Performance Of 110 Accused Companies, Gennaro Bernile, Gregg A. Jarrell, Howard Mulcahey
The Effect Of The Options Backdating Scandal On The Stock-Price Performance Of 110 Accused Companies, Gennaro Bernile, Gregg A. Jarrell, Howard Mulcahey
Research Collection Lee Kong Chian School Of Business
Since academic scholars and the Wall Street Journal reported widespread evidence indicating that option grants to executives were backdated, an avalanche of news stories followed documenting this ever-widening corporate scandal. In this study we ask: "How do disclosures of backdating affect shareholder value?" We closely examine 110 companies listed in the Wall Street Journal's Perfect Payday webpage, collecting all news stories related to options backdating. We find that shareholders of these 110 companies suffer on average significant stock-price declines, ranging between 20% and 50%. Moreover, these losses do not seem to be due to temporary overreactions (at least so far). …
Corporate Financial Policy And The Value Of Cash, Michael Faulkender, Rong Wang
Corporate Financial Policy And The Value Of Cash, Michael Faulkender, Rong Wang
Research Collection Lee Kong Chian School Of Business
We examine the cross-sectional variation in the marginal value of corporate cash holdings that arises from differences in corporate financial policy. We begin by providing semi-quantitative predictions for the value of an extra dollar of cash depending upon the likely use of that dollar, and derive a set of intuitive hypotheses to test empirically. By examining the variation in excess stock returns over the fiscal year, we find that the marginal value of cash declines with larger cash holdings, higher leverage, better access to capital markets, and as firms choose greater cash distribution via dividends rather than repurchases.
The Importance Of Issues Management In International Mergers And Acquisitions, Mark Chong
The Importance Of Issues Management In International Mergers And Acquisitions, Mark Chong
Research Collection Lee Kong Chian School Of Business
Issues management is the strategic use of issues analysis and strategic responses to help organizations make adaptations needed to achieve harmony and foster mutual interests within the communities in which they operate (Heath, 1997, p. 3). It seeks to build, maintain and repair relationships with an organizationÆs stakeholders by keeping surveillance for threats and opportunities in the environment that can affect success in achieving organizational mission and goals (Heath, 2002). Accordingly, organizations modify corporate policy, shape legislation or influence public opinion to synchronize themselves with the prevailing or emerging climate of public opinion and sensitivity
Personal Taxes, Endogenous Default, And Corporate Bond Yield Spreads, Sheen X. Liu, Howard Qi, Chunchi Wu
Personal Taxes, Endogenous Default, And Corporate Bond Yield Spreads, Sheen X. Liu, Howard Qi, Chunchi Wu
Research Collection Lee Kong Chian School Of Business
Term structure models have often been criticized for failing to explain satisfactorily the yield spread between corporate and Treasury bonds. A potential problem is that the personal tax effect is ignored in these models. In this paper, we employ a structural model to investigate the role of personal taxes on both debt and equity returns in capital structure decisions and assess their impact on corporate bond yield spreads. It is shown that personal taxes affect the firm's optimal capital structure, and the tax premium explains a substantial portion of yield spreads, especially for high-grade bonds. The predictive ability of the …
Government Ownership And The Performance Of Government-Linked Companies: The Case Of Singapore, James Ang, David K. Ding
Government Ownership And The Performance Of Government-Linked Companies: The Case Of Singapore, James Ang, David K. Ding
Research Collection Lee Kong Chian School Of Business
In an emerging economy, the alternative to government control is often no governance. We investigate the governance structure of government-linked companies (GLCs) in Singapore under the ownership/control structure of Temasek Holdings, the government holding entity, which typically owns substantial cash flow rights but disproportional control rights and exercises no operational control. We compare the financial and market performance of GLCs with non-GLCs, where each has a different set of governance structure, the key difference being government ownership. We show that Singaporean GLCs have higher valuations and better corporate governance than a control group of non-GLCs. The results hold even when …