Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2 Consolidated Balance Sheets as of March 31, 2005 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3 Consolidated Statements of Income for the Fiscal Years ended March 31, 2004, 2005 and 2006 . . . . . . . . . F-4 Consolidated...

The 1991 Delaware court ruling involving Credit Lyonnais expanded the fiduciary duties of managers towards debtholders in the event that a firm is within the proximity of insolvency. Using a difference-in-differences approach that exploits this exogenous shock, we find that the 1991 ruling induced managers of Delaware firms ex ante to place a greater emphasis on investments that foster long-ter...

Purpose – This paper investigates whether the identity of controlling shareholder is a determinant to distribution earnings (IOE vis-à-vis regular dividends) in sample Brazilian public companies. Theoretical framework Through numerical exemplifications, we show that cost receiving cash payouts through Interest on Equity (IOE) significantly heterogeneous across shareholders. We use this diversit...

The deadweight costs of financial distress limit many firms’ incentive to include a lot of (taxadvantaged) debt in their capital structures. It is therefore puzzling that firms do not make advance arrangements to re-capitalize themselves if large losses occur. Financial distress may be particularly important for large banking firms, which national supervisors are reluctant to let fail. The supe...

The use of equity-based compensation is an increasingly popular means by which to align the incentives of top management with that of the shareholders. However, recent theoretical and empirical research suggests that the use of equity-based compensation has the unintended consequence of creating the incentive to commit managerial fraud of the type being reported in the press. This paper reports...

Executive compensation is designed to create incentives for CEOs to act in the best interest of shareholders. Short-term (bonus) and equity-based incentives induce risk taking behaviors of the CEO that could further change a firm’s risk exposure. This article examines the linkage between compensation components and the impacts on a firm’s credit risk using data from the U.S. and Germany. In the...

It is well accepted that aligning managerial incentives with those of stock holders enhances shareholder value. In theory models, such alignment is usually modeled as giving managers a stake in the realized cash flows of the firm’s projects. However, such a stake, which entails a manager holding on to her equity position until all cash flow uncertainty is resolved, can lead a risk averse manage...

R. S. Berinde, P. R. Răchişan, Babeş-Bolyai University, Faculty of Business, Cluj-Napoca, Romania; C. Boţa-Avram, A. Groşanu, BabeşBolyai University, Faculty of Economics and Business Administration, Cluj-Napoca, Romania The article provides a statistical monograph of the fi nancial position and performance for the period 2008 – 2012 of the entities from the Romanian metallurgical sector whose ...

Purpose This article analyzes the effect of International Financial Reporting Standard (IFRS) 8 on informational content segment data. It aims to assess change in quality financial analysts' and shareholders' information environment due new reporting standard verify Accounting Standards Board’s (IASB) expectations conclusions its post-implementation review. Design/methodology/approach Based a s...