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July 2019
Article

Optimal Capital Structure and Bankruptcy Choice: Dynamic Bargaining vs Liquidation

By: Samuel Antill and Steven R. Grenadier

We model a firm’s optimal capital structure decision in a framework in which it may later choose to enter either Chapter 11 reorganization or Chapter 7 liquidation. Creditors anticipate equityholders’ ex-post reorganization incentives and price them into the ex-ante... View Details

Keywords: Default; Dynamic Bargaining; Capital Structure; Insolvency and Bankruptcy; Mathematical Methods

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24 Feb 2014
News

A Capital Idea for Small Business

Emeritus André Perold, who taught an investment management class and with whom Callaghan did research. Callaghan's subsequent career included portfolio management at Equitable Capital and hedge fund Odyssey Partners; small View Details

Keywords: Robert S. Benchley; crowd-funding; online communities; Finance; Securities, Commodities, and Other Financial Investments; Finance

25 Sep 2015
Working Paper Summaries

Invest in Information or Wing It? A Model of Dynamic Pricing with Seller Learning

Keywords: by Huang Guofang, Hong Luo & Jing Xia; Auto

October 1984 (Revised July 2003)
Case

At the T. Rowe Price Trading Desk (A)

By: Andre F. Perold

Describes the events surrounding the sale of a particular large block of a thinly traded stock. Brings the situation to the point at which the seller has received an offer, and must now decide what to do. View Details

Keywords: Asset Management; Stocks; Financial Services Industry

Fast Answer

Venture capital firms: create a list

How can I create a list of venture capital firms by geography, industry, stage, etc? Capital IQ: Mouse over Screening, and click Companies. Find the box labeled Investment/Advisory... View Details

01 Sep 2008
News

Is Market Capitalism Headed for Trouble?

appropriate to try to understand what major problems might lie ahead for market capitalism. By market capitalism we mean a system where decisions about what to produce and at what price are made by private... View Details

Keywords: Garry Emmons; Colleges, Universities, and Professional Schools; Educational Services; Management, Scientific, and Technical Consulting Services; Professional Services

2023
Working Paper

Contagious Anomalies

By: Angela Ma and Miles Zheng

This paper shows that anomaly strategy contagion contributes a key component of risks induced by arbitrageur trading. We present three main findings: (1) Contagion deteriorates the market liquidity of the contaminated strategy. (2) Increased contagion risk predicts... View Details

Keywords: Contagion; Anomalies; Non-bank Intermediaries; Arbitrage; Intermediary Asset Pricing

SSRN

August 2021 (Revised November 2021)
Case

The NCB Capital Turnaround: Waking the Sleeping Giant

By: Sandra J. Sucher, Gamze Yucaoglu, Shalene Gupta and Fares Khrais

The case opens in 2019, five years after, Sarah Al Suhaimi, CEO of NCB Capital (NCBC), the investment arm of Saudi’s largest bank, NCB, took the helm. Having successfully turned the business to make it the market leader, she was contemplating her next steps as... View Details

Keywords: Turnaround; Investment Banking; Financial Institutions; Change Management; Leadership; Business Model; Strategy; Business and Stakeholder Relations; Management Teams; Asset Management; Growth and Development Strategy; Saudi Arabia

Spring 2016
Article

Risk Neglect in Equity Markets

By: Malcolm Baker

The link between measures of risk and return within the equity market has been very weak over the past 47 years: in the United States, returns on high-risk stocks have cumulatively fallen short of the returns on low-risk stocks, during a period when the equity market... View Details

Keywords: Asset Allocation; Equity Investment; Behavioral Finance; Private Equity

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2008
Article

Governance and Merger Accounting: Evidence from Stock Price Reactions to Purchase versus Pooling

By: Francisco de Asis Martinez-Jerez

This paper examines the effect of corporate governance on investor reactions to accounting choice in the context of accounting for business combinations. Using a sample of 324 recent stock swap acquisitions I find that, contrary to practitioners' belief that capital... View Details

Keywords: Financial Reporting; Financial Statements; Mergers and Acquisitions; Capital Markets; Stocks; Price; Corporate Governance

SSRN

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2013
Working Paper

Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly

By: Malcolm Baker and Jeffrey Wurgler

Minimum capital requirements are a central tool of banking regulation. Setting them balances a number of factors, including any effects on the cost of capital and in turn the rates available to borrowers. Standard theory predicts that, in perfect and efficient capital... View Details

Keywords: Risk and Uncertainty; Cost of Capital; Capital Markets; Banks and Banking; Banking Industry; United States

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September 2020 (Revised June 2021)
Case

Eaton Corporation: Portfolio Transformation and The Cost of Capital

By: Benjamin C. Esty, E. Scott Mayfield and Daniel Fisher

In 2000, Eaton Corporation was a broadly diversified industrial conglomerate. But its strategy was evolving and its focus was narrowing around “power management” and more recently on “intelligent power,” the use of digitally enabled products and services designed to... View Details

Keywords: Mergers and Acquisitions; Business Conglomerates; Business Divisions; Cost of Capital; Corporate Finance; Value; Valuation; Industrial Products Industry; United States; Denmark; Republic of Ireland

February 2017 (Revised June 2017)
Supplement

ExxonMobil: Business as Usual? (B)

By: George Serafeim, Shiva Rajgopal and David Freiberg

The case presents ExxonMobil's response to growing pressure to disclose how climate change will impact their business. This includes multiple asset impairments and losing a proxy vote to shareholders to increase climate change related reporting. Supplements the (B)... View Details

Keywords: Oil ＆ Gas; Oil Prices; Oil Companies; Asset Impairment; Predictive Analytics; Sustainability; Environmental Impact; Innovation; Disclosure; Accounting; Valuation; Energy Sources; Ethics; Corporate Disclosure; Governance Compliance; Climate Change; Financial Reporting; Energy Industry; United States

Research Summary

The Role of Financial and Information Intermediaries in the Capital Markets

Hutton's research investigates the role of financial analysts and short sellers in the pricing of equity securities. Recently, Hutton examines (with Patricia Dechow and Richard Sloan) the role of sell-side analysts' earnings forecasts in the pricing of common equity... View Details

Eaton Corp.: Portfolio Transformation and the Cost of Capital

In 2000, Eaton Corporation was broadly diversified industrial conglomerate. But its strategy was evolving and its focus was narrowing around “power management” and more recently on “intelligent power,” the use of digitally enabled products and services designed... View Details

February 2000 (Revised April 2004)
Case

Butler Capital Partners and Autodistribution: Putting Private Equity to Work in France

Describes a proposed buyout transaction of Autodistribution, an entrepreneurial firm that is the leading car-parts distributor in France. The deal became feasible because of a failed takeover battle for Autodistribution's parent company. Private equity investor Butler... View Details

Keywords: Private Equity; Leveraged Buyouts; Valuation; Executive Compensation; Entrepreneurship; Distribution Industry; Auto Industry; France

July 2014
Case

Venture Capital at the Harvard Management Company in Historical Perspective

By: Felda Hardymon, Tom Nicholas and Vasiliki Fouka

The compromise between capital preservation and growth has always been central to the performance of the Harvard endowment. Setting an institutional structure for effectively governing this compromise became especially important when the Harvard Management Company... View Details

Keywords: Venture Capital; Financial Management; Asset Management; Higher Education; Investment; Financial Services Industry; Education Industry; Cambridge

12 May 2020
Working Paper Summaries

Elusive Safety: The New Geography of Capital Flows and Risk

Keywords: by Laura Alfaro, Ester Faia, Ruth Judson, and Tim Schmidt-Eisenlohr

Article

What are the Industries Attracting Private Equity Investments in Latin America?: Evidence from Twenty-five Countries from 2001 to 2008

By: Roberto Charvel

This article shows what are the industries attracting private equity investments in Latin America over time. View Details

Keywords: Private Equity; Venture Capital; Entrepreneurial Finance; Alternative Assets; Emerging Market; Business Ventures; Economics; Finance; Financial Services Industry; Latin America