Abstract: The paper tests the hypothesis that high managerial ownership entrenches managers by allowing CEO to create a board is unlikely monitor. results show strong negative relationship between level of and corporate governance factors, such as, split roles Chairman, proportion non‐executive directors, appointment director as Chairman. I also find companies with low are more likely change their structure comply Cadbury (1992) recommendations. suggest managers, through ownership, choose...

We analyze the simultaneous relationship between managerial ownership, board structure, and firm value, using a sample of all UK non-financial listed companies. test hypothesis that managers in should become entrenched at higher level ownership compared to their US counterparts because institutional differences across two markets. find strong U-shaped probability roles chairman CEO are split, non-executive director is appointed as chairman, proportion directors on board. However, we report...

Abstract This paper provides an empirical examination of the impact corporation tax and agency costs on firms' capital structure decisions. Our evidence suggests that are main determinants corporate borrowing. Consistent with theory, we find firms have fewer growth options more debt in their structure. Moreover, our results show mitigates free cash flow problem likely to be diversified less prone bankruptcy highly geared. negative effect insider shareholding leverage disappears, however;...

ABSTRACT This study examines the behavior of share prices around ex‐dividend dates before and after introduction 1988 Income Corporation Taxes Act that reduced substantially tax differential between dividends capital gains in United Kingdom. We find that, pre‐1988 period when taxation is high, ex‐day returns are positive significant. In contrast, post‐1988 period, are, most cases, negative insignificant. Further analysis reveals while significantly related to dividend yield length settlement...

We analyse the leasing decision of more than 3000 UK quoted and unquoted companies over sample period 1982–1996. show that, for as a whole, that use are likely to have tax losses, high fixed capital investment, debt‐to‐equity ratio be larger do not leasing. show, however, determinants homogeneous across firms different size. For large companies, leasing, profitability, leverage taxation positively correlated. In contrast, small is driven by or but growth opportunities. with Tobin's q those...

In the United Kingdom, main benefit from divestitures comes resolution of financial distress. These sales can minimize direct and indirect costs bankruptcy, which accounts for positive returns to divesting firm's shareholders.

Abstract: We argue that insiders' decisions to trade in short windows before news announcements are likely result from a trade‐off between the incentives capitalize on foreknowledge of disclosure and risk regulatory scrutiny reputation loss. provide evidence decision insiders buy is driven by this trade‐off. show strategically choose amount shares bought ahead good announcements, as they increase their purchases when price impact goes up, but purchased levels off becomes extreme. In...

Abstract We construct a unique data set that includes all reported institutional block trades on the London Stock Exchange and analyze market reaction to buy sell trades. find type of investors behind trade combination trade's size trader's resulting level ownership are major determinants information effects asymmetry between price impacts In particular, large undertaken by fund managers, most active in our sample, have strong content, while, for remaining trades, we report limited support...

The purpose of the paper is to test hypothesis that board structure and its impact on value a function firm's growth opportunities. Consistent with this hypothesis, results show that, while low firms are less likely have an independent board, i.e., split roles chairman CEO, high proportion non-executive directors appoint as chairman, their positively related these variables. In contrast, for firms, relationship between firm weak, suggesting does not always mitigate agency conflicts. suggest...

Abstract: We assess the market valuation of an unusual form stock dividends, referred to as bonus distributions, which are carried out by transferring accumulated equity reserves, mainly inflation revaluation paid‐in capital leaving total unchanged. In absence cash substitution and transaction cost effects, we find positive excess returns on announcement dates, particularly for financially weak firms, such non‐cash‐dividend‐paying firms. relate our results ‘paid‐in hypothesis’ under firms...

Firms in the United Kingdom that pay scrip (i.e., stock) dividends do not appear to be following optimal dividend policies. Scrip are driven by tax considerations or cash shortages. The payment of exacerbates agency costs free flow.