Brokerage analysts frequently comment on and sometimes recommend companies that their firms have recently taken public. We show stocks underwriter perform more poorly than "buy" recommendations by unaffiliated brokers prior to, at the time of, subsequent to recommendation date. conclude significant evidence of bias. also market does not recognize full extent this The results suggest a potential conflict interest inherent in different functions investment bankers perform.

ABSTRACT We show that repurchases have not only became an important form of payout for U.S. corporations, but also firms finance their share with funds otherwise would been used to increase dividends. find young a higher propensity pay cash through than they did in the past and become preferred initiating payout. Although large, established generally cut dividends, out repurchases. These findings indicate gradually substituted Our results suggest before 1983, regulatory constraints inhibited...

Firms that increase (decrease) dividends experience a significant decline (increase) in their systematic risk. The dividend‐increasing firms do not capital expenditure and profitability the years after dividend change. positive market reaction to is significantly related subsequent In long run, dividendincreasing with largest risk also price over next three years, suggesting changes may incorporate full extent of cost associated changes.

ABSTRACT Many dividend theories imply that changes in dividends have information content about the future earnings of firm. We investigate this implication and find only limited support for it. Firms increase year 0 experienced significant increases years −1 0, but show no subsequent unexpected growth. Also, size does not predict earnings. cut a reduction −1, these firms go on to 1. However, consistent with Lintner's model policy, are less likely than nonchanging experience drop Thus, their...

ABSTRACT This article investigates market reactions to initiations and omissions of cash dividend payments. Consistent with prior literature we find that the magnitude short‐run price are greater than for initiations. In year following announcements, prices continue drift in same direction, though is stronger more robust. post‐dividend initiation/omission distinct from pronounced earnings surprises. A trading rule employing both samples earns positive returns 22 out 25 years. We little...

ABSTRACT Contrary to the implications of many payout theories, we find that announcements open‐market share repurchase programs are not followed by an increase in operating performance. However, repurchasing firms experience a significant reduction systematic risk and cost capital relative non‐repurchasing firms. Further, consistent with free cash‐flow hypothesis, market reaction is more positive among those likely overinvest. Finally, evidence indicate investors underreact because they...

We test the empirical implications of several models IPO underpricing. Consistent with winner's-curse hypothesis, we show that in markets where investors know a priori they do not have to compete informed investors, IPOs are underpriced. also underwritten by reputable investment banks experience significantly less underpricing and perform better long run. find support for signaling try explain why firms underprice. In fact, (1) underprice more return reissue market frequently, lesser...

We examine the dynamic relation between return and volume of individual stocks. Using a simple model in which investors trade to share risk or speculate on private information, we show that returns generated by risk-sharing trades tend reverse themselves, while speculative continue themselves. test this theoretical prediction analyzing daily first-order autocorrelation for stocks listed NYSE AMEX. find cross-sectional variation is related extent informed trading manner consistent with prediction.

ABSTRACT We examine the relation between institutional holdings and payout policy in U.S. public firms. find that affects holdings. Institutions avoid firms do not pay dividends. However, among dividend‐paying they prefer fewer Our evidence indicates institutions repurchase shares, regular repurchasers over nonregular repurchasers. Higher or a concentration of cause to increase their dividends, repurchases, total payout. results support models predict high dividends attract clientele,

ABSTRACT We investigate the empirical implications of using various measures payout yield rather than dividend for asset pricing models. find statistically and economically significant predictability in time series when (dividends plus repurchases) net repurchases minus issuances) yields are used instead yield. Similarly, we that (net payout) contains information about cross section expected stock returns exceeding yields, high low portfolio is a priced factor.

Abstract Since the late 1990s, over 75% of US industries have experienced an increase in concentration levels. We find that firms with largest increases product market show higher profit margins and more profitable mergers acquisitions deals. At same time, we no evidence for a significant operational efficiency. Taken together, our results suggest power is becoming important source value. These findings are robust to inclusion (i) private firms; (ii) factors accounting foreign competition;...

This paper examines aftermarket trading of underwriters and unaffiliated market makers in the three‐month period after an IPO. We find that lead underwriter is always dominant maker; he takes substantial inventory positions trading, co‐managers play a negligible role trading. The engages stabilization activity for less successful IPOs, uses overallotment option to reduce his risk. Compensation arises primarily from fees, but does generate positive profits, which are positively related degree...

Researchers are increasingly using data from the Nasdaq market to examine pricing be? havior, design, and other microstructure phenomena. The validity of any study that classifies trades as buys or sells depends on accuracy classification method. Us? ing a proprietary set identifies trade direction, we several algorithms. We find quote rule, tick Lee Ready (1991) rule correctly classify 76.4%, 77.66%, 81.05% ofthe trades, re? spectively. However, all rules have only very limited success in...

We survey 384 financial executives and conduct in depth interviews with an additional 23 to determine the factors that drive dividend share repurchase decisions. Our findings indicate maintaining level is on par investment decisions, while repurchases are made out of residual cash flow after spending. Perceived stability future earnings still affects policy as Lintner (1956). However, fifty years later, we find link between dividends has weakened. Many managers now favor because they viewed...

We compare the dividend policies of publicly and privately held firms in order to help identify forces shaping corporate dividends, shed light on behavior companies. show that private smooth dividends significantly less than their public counterparts, suggesting scrutiny capital markets plays a central role propensity over time. Public pay relatively higher tend be more sensitive changes investment opportunities otherwise similar firms. Ultimately, ownership structure incentives play key...

We document the cross-sectional properties of corporate dividend-smoothing policies and relate them to extant theories. find that younger, smaller firms, firms with low dividend yields more volatile earnings returns, fewer disperse analyst forecasts smooth less. Firms are cash cows, growth prospects, weaker governance, greater institutional holdings, more. also smoothing has steadily increased over past 80 years, even before began using share repurchases in mid-1980s. Taken together, our...

One of the most important predictions dividend‐signaling hypothesis is that dividend changes are positively correlated with future in profitability and earnings. Contrary to this prediction, we show that, after controlling for well‐known nonlinear patterns behavior earnings, contain no information about earnings changes. We also negatively (return on assets). Finally, investigate whether including improves out‐of‐sample forecasts. find models include do not outperform those

ABSTRACT We examine changes in the scope of sell‐side analyst industry and whether these impact information dissemination quality analysts’ reports. Our findings suggest that number analysts covering an competition have significant spillover effects on other forecast accuracy, bias, report informativeness, effort. These are incremental to firm level coverage. Overall, a more presence has positive externalities can result better functioning capital markets.

The purpose of this monograph is to provide an overview the IPO literature since 2000. fewer numbers companies going public in recent years has raised many questions regarding process, both academic and regulatory circles. As we all strive understand these changes market, it especially important dynamics underlying process. If process too costly or mechanism plagued by conflicts interest among various intermediaries, then private may rationally choose other methods raising capital. In a...

Abstract Passively managed index funds now hold over 30$\%$ of U.S. equity fund assets; this shift raises fundamental questions about monitoring and governance. We show that, relative to active funds, are less effective monitors: (a) they likely vote against firm management on contentious governance issues; (b) there is no evidence engage effectively publicly or privately; (c) promote board independence worse pay-performance sensitivity at their portfolio companies. Overall, the rise...

Abstract Based on textual analysis and a comparison of cybersecurity risk disclosures firms that were hacked to others not, we propose novel firm-level measure for all U.S.-listed firms. We then examine whether is priced in the cross-section stock returns. Portfolios with high exposure outperform other firms, average, by up 8.3$\%$ per year. Yet, high-exposure perform poorly periods risk. Reassuringly, higher information-technology industries, correlates characteristics linked hit...

Abstract Using micro-level data, we examine the behavior of socially responsible investment (SRI) funds. SRI funds select firms with lower pollution, more board diversity, higher employee satisfaction, and better workplace safety. Yet, both in cross-section using an exogenous shock to capital, find that do not significantly change firm behavior. Moreover, little evidence they try impact shareholder proposals. Our results suggest are greenwashing, but washing; invest a portfolio environmental...

Abstract Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholders’ interests they advertise maximizing shareholder value favored by their families. We find that these support ES proposals are far from majority threshold, while opposing them when vote is more likely to be pivotal. This strategy results a high average for proposals, seemingly consistent with fiduciary responsibilities, contested proposals. greenwashing driven who cater institutional...