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This paper examines whether financial buyers are more likely to initiate takeovers of inefficient firms. We show that they indeed are and thus conclude that takeovers by…
This paper examines whether financial buyers are more likely to initiate takeovers of inefficient firms. We show that they indeed are and thus conclude that takeovers by financial buyers play a potentially beneficial role in the allocation of corporate assets in the US. economy. Our analysis of determinants of takeovers initiated by financial buyers uses an application of the methodology developed in Trimbath, Frydman and Frydman (2001). In order to illustrate efficiency enhancements introduced by financial buyers, we select Forstmann Little’s acquisition of General Instrument for a brief case study. We show that their aggressive programs of cost management substantially improved the efficiency of General Instrument. Moreover, it allowed General Instrument to expand research and development to become the global leader in high definition television.
The purpose of this paper is to connect the dots between subprime mortgage lending and the financial crisis of 2008.
Descriptive analysis of structured securities.
The innovation of structured securities was incorrectly implemented in the case of mortgage‐related securities.
There is no centralized source for data connecting mortgages with securities, thereby making a rigorous, statistical analysis impossible.
The US Congress authorized $700 billion to purchase “troubled assets,” defined as “residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages … ” This paper exploits the difference between mortgages and those securities.
The paper extends knowledge on the topic of mortgage related securities.
The purpose of this paper is: to detail the importance of corporate governance to institutional investors; to describe the tension created by their desire to earn extra…
The purpose of this paper is: to detail the importance of corporate governance to institutional investors; to describe the tension created by their desire to earn extra revenue from stock lending; and to outline the challenges to corporate governance presented by the subsequent lack of accounting for voting rights.
Descriptive analysis, including historical perspective on the reliance of corporate governance on active shareholder investors.
Voting rights are not being tracked when securities are loaned out, resulting in improper and inappropriate vote counting.
This commentary makes the argument in favor of shareholder activism.
In addition to added transparency in the voting process, accounting systems similar to those used in the USA for dividend reporting could be applied to track voting rights and votes for corporate governance matters.
The paper aligns knowledge about securities lending with issues in corporate governance.