I examine the role of debt-financed special payments to shareholders in defending incumbent managements during proxy contests. This role is based on shareholder preference for dividends and the consequent linkage between dividends and managerial security. The model is used to explain why the seemingly contradictory phenomena of (i) wealth losses to shareholders and (ii) lack of any substantial ...

We examine how insiders and firms trade when arbitrage is limited. When arbitrage is costly (proxied by high idiosyncratic risk), insiders and firms earn higher absolute returns on their trades (insider trading, share repurchases, and seasoned equity offerings) in the following year. Furthermore, they initiate their trades following greater past price movements in the preceding year. These resu...

We study the leverage of firms making large dividend increases. Over the five years following the dividend increase they raise leverage enough to finance the entire dividend increase for that period with debt. This is not explained by trade-off variables or the pecking order. The effect is greatest for big firms with low-powered incentives, suggesting an agency effect whereby they make large di...

This paper examines how control and ownership structure affect share repurchases in an emerging market where controlling families derive large private benefits. Whereas firms with concentrated ownership often pay cash dividends, firms with weak control rights often repurchase shares. The magnitude of repurchase increases with weak control rights, but decreases with strong foreign ownership. The...

We develop an agency model of financial contracting. We derive long-term debt, a line of credit, and equity as optimal securities, capturing the debt coupon and maturity; the interest rate and limits on the credit line; inside versus outside equity; dividend policy; and capital structure dynamics. The optimal debt-equity ratio is history dependent, but debt and credit line terms are independent...

G00–G09, Inflammatory diseases of the central nervous system G10–G14, Systemic atrophies primarily affecting the central nervous system G20–G26, Extrapyramidal and movement disorders G30–G32, Other degenerative diseases of the nervous system G35–G37, Demyelinating diseases of the central nervous system G40–G47, Episodic and paroxysmal disorders G50–G59, Nerve, nerve root, and plexus disorders G...