Tag Archives: finance

Debt Markets Retort to Mandatory Corporate Social Responsibility  

By | January 5, 2023
0 Comment

Over decades, scholars across disciplines have proposed and discussed myriad “objectives” of the firm—shareholder value maximization, stakeholder theory, long-term firm value maximization, shareholder welfare maximization, and shareholder wealth maximization with stakeholder interests. One extreme is shareholder primacy, and the other is stakeholder capitalism (or conscious capitalism). The latter advocates corporate social responsibility (CSR) and has… Read More »

Who Sells Cryptocurrency?

By | January 2, 2023
0 Comment

On March 9, 2022, U.S. President Joe Biden issued a pivotal Executive Order “outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.” Meanwhile, the Securities and Exchange Commission (SEC) considers protecting “main street” investors to be at the heart of U.S. financial… Read More »

Are Blockchain and Cryptocurrency M&As Harder to Close?

By | December 29, 2022
0 Comment

Blockchain has been one of the fastest-growing technologies in the last decade. While some of this impressive growth has been organic, mergers and acquisitions (M&A) have aided substantially, particularly in the last several years. The recent cryptocurrency report of PricewaterhouseCoopers emphasizes the extent of this contribution by documenting that “(t)he total value of crypto M&A… Read More »

Legal Liability of a 51%, Goldfinger Cryptocurrency Attack

By | December 28, 2022
1 Comment

Introduction  With a market cap of over $1 trillion, cryptocurrencies have quickly gone from an obscure novelty to an alternative currency juggernaut. The recent collapse of FTX, related entities, and others in the crypto ecosystem has drawn heightened attention to this important technology. Cryptocurrencies are decentralized digital currencies; cryptocurrencies also rely on the blockchain, described… Read More »

‘Doing the Job That’s Required?’: Social License to Operate and Directors’ Duties 

By | December 27, 2022
0 Comment

The concept of social license to operate (SLO) is becoming increasingly important as a de-facto corporate regulatory device, with implications for how company directors discharge their duties. While an agreed definition of SLO is hard to identify, at its broadest, SLO might be described as the public’s expectation that businesses will ‘do the right thing.’ This… Read More »

The Value of Undiversified Shareholder Engagement 

By | December 22, 2022
0 Comment

Modern capital markets facilitate the separation of ownership and control. This allows shareholders to diversify their portfolios and firms to undertake value-generating projects regardless of their level of idiosyncratic risk. However, the universal push for diversification often means that shareholders do not bear sufficient risk to incentivize them to monitor the firms in their portfolios.… Read More »

Accounting Conservatism and the Agency Problems of Overvalued Equity 

By | December 21, 2022
0 Comment

In capital markets, the stock market value of a company can sometimes exceed its underlying (fundamental) value. Such overvaluation can materialize over months or even years. Sustained overvaluation is viewed in academic research as a threat to the functioning of capital markets, being at the root of several value-destroying episodes that made the financial system… Read More »

Anti-Corruption Laws and Geographic Reporting Transparency 

By | December 19, 2022
0 Comment

Do companies attempt to disguise their exposure to foreign corruption? Our research investigates whether U.S. companies respond to heightened regulatory risk exposure from foreign anti-corruption laws by increasing or decreasing their geographic reporting transparency regarding their underlying exposure to countries with high risk of corruption.  The U.S. Foreign Corrupt Practices Act (FCPA) exposes U.S. and… Read More »

Do CEOs Benefit from Employee Pay Raises? Evidence from a Federal Minimum Wage Law 

By | December 15, 2022
0 Comment

The rising disparity between CEO and worker pay over the past few decades has been attracting considerable attention from academics. Over the last two decades, the CEO to median employee pay ratio has been increasing for small (S&P SmallCap 600), medium (S&P MidCap 400), and large (S&P 500) firms. The literature names the managerial rent… Read More »

The Cost of Equity: Evidence From Investment Banking Valuations 

By | December 14, 2022
0 Comment

Cost of equity (COE) is one of the most important financial metrics firms and investors consider when evaluating potential investments. There is an enormous academic literature that either proposes measures of cost of equity or uses it to study asset prices or corporate decisions. Further, practitioners employ discount rates ubiquitously, including for discounted cash flow… Read More »