The Implications Of Granting Backdated Options

Option backdating has recently been receiving extensive attention.  The remarkable pattern of stock prices systematically declining before and increasing after the granting of options has been documented in research papers for approximately a decade but only recently have firms been facing charges of improper procedures associated with this pattern.  One associated issue remaining to be investigated is what the implications are for shareholders of affected firms.  This paper addresses that issue.  It finds that there are marked negative implications for stockholders.  On average, when investigations into backdating are announced firms lose approximately 11% of their market value.  This translates into an average decline of more than half a billion dollars in market capitalization in the month leading up to the formal announcement of an investigation

The ongoing contributions of spin-off research and practice to understanding corporate restructuring and wealth creation: $100 billion in 1 decade

AbstractSince the 1980s, analysis of spin-offs has become a key line of inquiry in corporate finance. This paper reviews the theory and empirical research papers about spin-off restructuring and measures the monetary value created by spin-offs. First, we document the valuation impact of spin-offs for the divesting firms and then examine such subtleties as the interesting (positive) ex-dividend day price impact and the myriad other details associated with these transactions. This study provides a review of the now extensive research into spin-off divestitures. It looks into equity price reactions around the announcements of 249 voluntary spin-offs undertaken by US public companies over the interval 2007–2017. The abnormal returns associated with recent spin-off divestitures are of the same order of magnitude as those from the earlier papers, showing the sustained statistical significance and new economic materiality measures. With more firms undertaking spin-offs and the positive abnormal returns continuing to be substantial, the clear implication is that the overall monetary value creation resulting from spin-offs has increased markedly. Finally, and in a first for spin-off research, this paper calibrates the monetary value created by spin-offs despite the voluminous research of the topic. It establishes that spin-offs create large monetary value increments for divesting a firm's stockholders—almost $100 billion in the interval 2007–2017

Modeling Groundwater Inundation Under Sea-Level Rise Scenarios in the Surficial Aquifer of Bogue Banks, North

Bogue Banks in North Carolina is expected to be impacted by sea-level rise, but the impact on the subsurface groundwater system is not well understood. A three-dimensional Visual MODFLOW steady-state model and ArcGIS 10.3 were used to quantify the extent of marine and groundwater inundation by the year 2100. Visual MODFLOW was used to simulate the water table on Bogue Banks, first at current sea-level then at different sea-level rise scenarios. The results from Visual MODFLOW were then imported into ArcGIS to calculate the area inundated by marine and groundwater inundation. Sea-level rise between 0.2 and 1.4 m above present conditions may occur at Bogue Banks and seven scenarios were envisioned as appropriate intervals to forecast. A total of 29 monitoring wells were installed in the surficial aquifer of Bogue Banks and equipped with water level loggers to collect groundwater data. Aquifer properties were constrained by studying sediment cores collected during well construction. Marine and groundwater inundation combine to impair 33% to 79% of the island by the year 2100, with 43% to 51% of the island being inundated in the most likely scenarios of 0.4 to 0.6 m of sea-level rise above current conditions. Marine inundation estimates range from 5% to 31% with 11% to 17% inundation in the most likely scenarios. Groundwater inundation estimates ranged from a minimum of 28% to 48% of the area not impaired by marine inundation, with the most likely range indicating 33% to 40% inundation. The results indicate that as sea-level rise increases in severity, groundwater inundation covers a much larger area of the island than marine impairment. The results of the study therefore suggest that as sea-level rises, residents of Bogue Banks may need to account for marine and groundwater inundation as the environment changes and sea-level rises. A greater understanding of the combined impacts of groundwater and marine inundation on barrier islands may be useful for coastal residents in mitigating or adapting to changes due to sea-level rise not just in North Carolina, but globally

The Informational Content And Valuation Ramifications Of Earnings Restatements

This paper analyzes the market responses to different categories of accounting restatements.  Accounting restatements have been occurring with increasing frequency in recent years, generating significant discussion as to their causes and consequences.  We examine both of these dimensions of restatements.  We identify 9 categories into which restatements can be classified.  When examining their valuation consequences, we find statistically significant negative revaluations for the overall sample. However, there is substantial variation in valuation changes across the various categories of restatements.  Investors react the most negatively to restatements resulting from accounting issues (i.e. errors/irregularities/method-changes).  This is greatly magnified when there is a contemporaneous change in the firm’s CEO.  At the other end of the spectrum, we find positive reactions to restatements that reflect and provide the accounting calibration of previously announced settlements of legal issues.  A notable feature of the findings is that for some categories there are valuation changes in response to accounting restatements which are seemingly just recording the implications of previously announced corporate happenings.  In the context of efficient market perspectives, some of these changes at the time of the restatement announcement itself are somewhat surprising

The Association Between –Market Risk Disclosure Reporting And Firm Risk: The Impact Of SEC FRR No. 48

SEC FRR No. 48 requires that all firms report their market risk exposures using one or more of three alternative formats for disclosure: tabular format, sensitivity analysis, or Value at Risk (VaR). In this paper we examine how the method chosen affects a firm’s risk as measured by total risk, the cost of equity, and firm specific risk. We find that firms using VaR have higher total risk and firm specific risk than firms using sensitivity analysis. Conversely, firms employing tabular disclosure generally have lower but not statistically significant lower total risk, cost of equity, and firm specific risk than firms using sensitivity

Deep VLA Observations of the Cluster 1RXS J0603.3+4214 in the Frequency Range of 1–2 GHz

We report L-band VLA observations of 1RXS J0603.3+4214, a cluster that hosts a bright radio relic, known as the Toothbrush, and an elongated giant radio halo. These new observations allow us to study the surface brightness distribution down to one arcsec resolution with very high sensitivity. Our images provide an unprecedented detailed view of the Toothbrush, revealing enigmatic filamentary structures. To study the spectral index distribution, we complement our analysis with published LOFAR and GMRT observations. The bright `brush' of the Toothbrush shows a prominent narrow ridge to its north with a sharp outer edge. The spectral index at the ridge is in the range $-0.70\leq\alpha\leq-0.80$. We suggest that the ridge is caused by projection along the line of sight. With a simple toy model for the smallest region of the ridge, we conclude that the magnetic field is below $5\,\rm\mu G$ and varies significantly across the shock front. Our model indicates that the actual Mach number is higher than that obtained from the injection index and agrees well with the one derived from the overall spectrum, namely ${\cal M}=3.78^{+0.3}_{-0.2}$. The radio halo shows an average spectral index of $\alpha=-1.16\pm0.05$ and a slight gradient from north to south. The southernmost part of the halo is steeper and possibly related to a shock front. Excluding the southernmost part, the halo morphology agrees very well with the X-ray morphology. A power-law correlation is found between the radio and X-ray surface brightnessComment: 23 pages, 21 figures, accepted for publication in Ap

The SAMI Galaxy Survey: Cubism and covariance, putting round pegs into square holes

We present a methodology for the regularization and combination of sparse sampled and irregularly gridded observations from fibre-optic multiobject integral field spectroscopy. The approach minimizes interpolation and retains image resolution on combining subpixel dithered data. We discuss the methodology in the context of the Sydney-AAO multiobject integral field spectrograph (SAMI) Galaxy Survey underway at the Anglo-Australian Telescope. The SAMI instrument uses 13 fibre bundles to perform high-multiplex integral field spectroscopy across a 1° diameter field of view. The SAMI Galaxy Survey is targeting ~3000 galaxies drawn from the full range of galaxy environments. We demonstrate the subcritical sampling of the seeing and incomplete fill factor for the integral field bundles results in only a 10 per cent degradation in the final image resolution recovered. We also implement a new methodology for tracking covariance between elements of the resulting data cubes which retains 90 per cent of the covariance information while incurring only a modest increase in the survey data volume

The XXL Survey: VI. The 1000 brightest X-ray point sources

X-ray extragalactic surveys are ideal laboratories for the study of the evolution and clustering of active galactic nuclei (AGN). The XXL Survey spans two fields of a combined 50 $deg^2$ observed for more than 6Ms with XMM-Newton, occupying the parameter space between deep surveys and very wide area surveys; at the same time it benefits from a wealth of ancillary data. This paper marks the first release of the XXL point source catalogue selected in the 2-10 keV energy band with limiting flux $F_{2-10keV}=4.8\cdot10^{-14}\rm{erg\,s^{-1}\,cm^{-2}}$. We use both public and proprietary data sets to identify the counterparts of the X-ray point-like sources and improved upon the photometric redshift determination for AGN by applying a Random Forest classification trained to identify for each object the optimal photometric redshift model library. We also assign a probability to each source to be a star or an outlier. We model with Bayesian analysis the X-ray spectra assuming a power-law model with the presence of an absorbing medium. We find an average unabsorbed photon index of $\Gamma=1.85$ and average hydrogen column density $\log{N_{H}}=21.07 cm^{-2}$. We find no trend of $\Gamma$ or $N_H$ with redshift and a fraction of 26% absorbed sources ($\log N_{H}>22$). We show that the XXL-1000-AGN number counts extended the number counts of the COSMOS survey to higher fluxes and are fully consistent with the Euclidean expectation. We constrain the intrinsic luminosity function of AGN in the 2-10 keV energy band where the unabsorbed X-ray flux is estimated from the X-ray spectral fit up to z=3. Finally, we demonstrate the presence of a supercluster size structure at redshift 0.14, identified by means of percolation analysis of the XXL-1000-AGN sample. The XXL survey, reaching a medium flux limit and covering a wide area is a stepping stone between current deep fields and planned wide area surveys