Market Valuation of Employee and Director Bonuses for Profitable High-Tech Firms: The Case of Taiwan
نویسنده
چکیده
This study examines whether investors incorporate the effect of employee and director bonuses into firm market valuation for a sample of 191 profitable high-tech firms during 2001-2007 in Taiwan. We use the Ohlson (1995) equity valuation model, and compare difference dilution ratio model’s explanation power. We find a negative correlation between the value of CSBs and Tobin’s Q but no significant, it may be the trade-off between dilutive effects and incentive efforts. The results suggest that investors appear to value these firms’ CSBs as an expense but as an intangible asset on the firm’s equity value.
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