The role of the medium of exchange in competition among bidders and its effect on returns to stockholders in corporate takeovers are investigated. Consistent with recent empirical evidence, our model shows that stockholders of both acquiring and target firms obtain higher returns when a takeover is financed with cash rather than equity, and that returns to target shareholders increase with comp...

This study examines the effect of corporate liquidity and investor protection on the relation between financial distress and equity returns using a European sample over the 2002-2016 period. The results show that returns are hump-shaped and decreasing for increasing default risk. This can be rationalized by corporate liquidity indicating that higher cash holdings decrease liquidity risk. Moreov...

We examine the shareholder wealth effects associated with 97 global equity offerings made by foreign firms in the United States. Although on average these global offerings are not associated with a negative stock price response, firms located in emerging markets have negative abnormal returns while those located in developed markets have positive abnormal returns. In addition, we find that the ...

This paper analyses data for the aggregate daily trading of all foreign investors in six Asian emerging equity markets and provides two new findings. First, foreigners’ flows into several markets show positive-feedback trading with respect to global, as well as domestic, equity returns. In particular, foreigners tend to be buyers in these markets on the day after rises in these markets or in US...

Recent tests of stochastic dominance of several orders proposed by Linton, Maasoumi and Whang (2003) are applied to reexamine the equity premium puzzle. An advantage of this nonparametric framework is that it provides a means to assess whether the existence of a premium is due to particular cardinal choices of either the utility function or the underlying returns distribution, or both. The appr...

OMID SHAKERNIA is a senior researcher at Research Affiliates, LLC, in Newport Beach, CA. [email protected] Traditional strategic asset allocation theory is deeply rooted in the mean–variance portfolio optimization framework developed by Markowitz [1952] for constructing equity portfolios. However, the mean–variance optimization methodology is diff icult to implement due to the challenges asso...

This paper uses a data set of industry-level equity returns from both developed and emerging markets to investigate whether the quality of the institutional environment recently shown to affect capital markets’ size also affects the expected return on equity. The paper documents that the required rate of return on equity is negatively associated with the enforceability of contracts and the impa...

This study aims to determine the effect of return on assets, equity, and debt equity ratio stock returns in clothing luxury goods sub-sector companies Indonesian exchange. The method used this research is a quantitative method. data secondary obtained from financial statements 6 through Stock Exchange website for 2017-2021. sampling technique purposive total 30 data.The results showed that asse...