Managerial Ownership And Dividend Policy In The U.S. Banking Industry

This paper examines a sample of U.S. Bank Holding Companies (BHCs) to determine if there is a relationship between managerial equity ownership (insider holdings) and the level of dividends paid out by the BHC. Given the findings of prior research, the analysis is performed using Two-Stage Least Squares (2SLS) regression with three equations. The three dependent variables are DIVPAY (dividend payout), DEBT (total liabilities over total consolidated assets) and INSIDER (percentage of common stock held by officers and directors). This study finds that insider holdings has a non-linear relation with dividend payout. Initially, there is a significant negative relation between the level of insider holdings and the level of dividends paid. However, higher levels of insider holdings show a positive relation with the level of dividends paid

Target company cross-border effects in acquisitions into the UK

We analyse the abnormal returns to target shareholders in crossborder and domestic acquisitions of UK companies. The crossborder effect during the bid month is small (0.84%), although crossborder targets gain significantly more than domestic targets during the months surrounding the bid. We find no evidence for the level of abnormal returns in crossborder acquisitions to be associated with market access or exchange rate effects, and only limited support for an international diversification effect. However, the crossborder effect appears to be associated with significant payment effects, and there is no significant residual crossborder effect once various bid characteristics are controlled for

Venture capital-backed firms, unavoidable value-destroying trade sales, and fair value protections

This paper investigates the implications of the fair value protections contemplated by the standard corporate contract (i.e., the standard contract form for which corporate law provides) for the entrepreneur–venture capitalist relationship, focusing, in particular, on unavoidable value-destroying trade sales. First, it demonstrates that the typical entrepreneur–venture capitalist contract does institutionalize the venture capitalist’s liquidity needs, allowing, under some circumstances, for counterintuitive instances of contractually-compliant value destruction. Unavoidable value-destroying trade sales are the most tangible example. Next, it argues that fair value protections can prevent the entrepreneur and venture capitalist from allocating the value that these transactions generate as they would want. Then, it shows that the reality of venture capital-backed firms calls for a process of adaptation of the standard corporate contract that has one major step in the deactivation or re-shaping of fair value protections. Finally, it argues that a standard corporate contract aiming to promote social welfare through venture capital should feature flexible fair value protections.info:eu-repo/semantics/publishedVersio

The Impact of Trust-Preferred Issuance on Bank Default Risk and Cash Flow: Evidence from the Debt and Equity Securities Markets

Trust-preferred stock is a debt-equity hybrid that offers the tax deductibility of dividends but is treated as equity capital by bank regulators and rating agencies. The purpose of this paper is to examine whether holders of bank debt securities benefit from trust-preferred issuance in the form of lower default premia and whether bank shareholders benefit from the tax deductibility of trust-preferred dividends. Using daily returns surrounding the Federal Reserve's announcement that trust-preferred securities would be included as a component of commercial banks' Tier I equity capital, we find evidence to support both hypotheses. Copyright 2003 by the Eastern Finance Association.