Decentralized Investment Banking: The Case of Discount Dividend-Reinve stment and Stock-Purchase Plans

Discount dividend-reinvestment and stock-purchase plans allow shareholders to capture part of the underwriting fees incurred in new stock offerings and save sponsoring firms some of the usual underwriting costs. We tested the degree to which individual investors can profitably serve this investment banking function by implementing simple investment/trading strategies designed to capture the discounts and distribute the shares in the market. The large profits earned by our strategies raise serious questions about why it takes firms so long to raise the target level of capital and why many eligible shareholders do not participate in these discount plans.

Employee Stock Ownership Plans and Corporate Restructuring: Myths and Realities

During the first six months of 1989 U.s. corporations acquired over $19 billion of their own stock to establish employer stock ownership plans (ESOPs). We evaluate the common claims that there exist unique tax and incentive contracting advantages to establishing ESOPs. Our analysis suggests that, particularly for large firms, where the greatest growth in ESOPs has occurred, the case is very weak for taxes being the primary motivation to establish an ESOP. The case is also weak for employee incentives being the driving force behind their establishment. We conclude that the main motivation for the growth of ESOPs is their anti-takeover characteristics.

Converting Corporations to Partnerships through Leverage: Theoretical and Practical Impediments

We explore the degree to which debt financing can reduce the corporate-level tax on income in the U.S.. Although we show that debt is capable of shielding the competitive rate of return on projects from the corporate-level tax, debt financing cannot shield the positive net present value portion of project returns. Since nontax factors preclude corporate activities from being 100% debt-financed, a portion of the competitive return to corporate activity is also subject to double taxation. We also consider alternative mechanisms that serve to convert the corporate tax to a personal tax (or a partnership tax). These include other claims that give rise to tax deductible payments to the corporation such as obligations to employees, lessors and suppliers. As we show, all of these alternatives are limited in their ability to eliminate the corporate-level tax.

The Effects of Changes in Tax Laws on Corporate Reorganization Activity

We present evidence that changes in tax laws passed in the 1980s, culminating with the Tax Reform Act of 1986, had a first order effect on observed merger and acquisition activity in the US. We also present evidence of increased reliance on certain institutional arrangements (unit management buyouts and going-private transactions) used to effect mergers and acquisitions that were designed to reduce the nontax costs of transacting, thereby enabling tax benefits to be realized in a larger number of mergers and acquisitions than might otherwise have occurred. We begin with a "closed-economy" perspective, focusing on the effects of changes in tax laws on the demand for mergers and acquisitions of us corporations by US corporations. We then broaden the scope of inquiry by modeling and testing the effects of changes in tax laws on the demand for mergers and acquisitions of US corporations by foreign multinationals. Here we predict and present confirmatory evidence that while the 1986 Tax Act discouraged transactions among US corporations, it increased the demand for merger and acquisition transactions between US sellers and foreign buyers.

How Investors Can (and Can\u27t) Create Social Value

Most investors throughout the world have a single goal: to earn the highest risk- adjusted financial returns. They would not accept a lower financial return from an investment that also produced social benefits. More recently, an increasing number of socially-motivated investors have goals beyond maximizing returns. They also seek to align their investments with their social values (value alignment), and some also seek to cause the companies in which they invest to create more social value as a result of their investment (social value creation). We show in this essay that while it is relatively easy to achieve value alignment, creating social value is far more difficult

Thermal segmentation of mid-ocean ridge-transform faults

Author Posting. © American Geophysical Union, 2017. This article is posted here by permission of American Geophysical Union for personal use, not for redistribution. The definitive version was published in Geochemistry, Geophysics, Geosystems 18 (2017): 3405–3418, doi:10.1002/2017GC006967.3-D finite element simulations are used to calculate thermal structures and mantle flow fields underlying mid-ocean ridge-transform faults (RTFs) composed of two fault segments separated by an orthogonal step over. Using fault lengths and slip rates, we derive an empirical scaling relation for the critical step over length ( inline image), which marks the transition from predominantly horizontal to predominantly vertical mantle flow at the base of the lithosphere under a step over. Using the ratio of step over length (LS) to inline image, we define three degrees of segmentation: first-degree, corresponding to type I step overs ( inline image ≥ 3); second-degree, corresponding to type II step overs (1 ≤  inline image < 3); and third-degree, corresponding to type III step overs ( inline image <1). In first-degree segmentation, thermal structures and mantle upwelling patterns under a step over are similar to those of mature ridges, where normal mid-ocean ridge basalts (MORBs) form. The seismogenic area under first-degree segmentation is characteristic of two, isolated faults. Second-degree segmentation creates pull-apart basins with subdued melt generation, and intratransform spreading centers with enriched MORBs. The seismogenic area of RTFs under second-degree segmentation is greater than that of two isolated faults, but less than that of an unsegmented RTF. Under third-degree segmentation, mantle flow is predominantly horizontal, resulting in little lithospheric thinning and little to no melt generation. The total seismogenic area under third-degree segmentation approaches that of an unsegmented RTF. Our scaling relations characterize the degree of segmentation due to step overs along transform faults and provide insight into RTF frictional processes, seismogenic behavior, and melt transport.NSF Grant Numbers: OCE-1352565, OCE-14-58201; NOAA. Grant Number: NA10NOS4000073; 2011 ExxonMobil Geosciences2018-03-1

Nanoscopy of bacterial cells immobilized by holographic optical tweezers

Diekmann R, Wolfson D, Spahn C, Heilemann M, Schüttpelz M, Huser T. Nanoscopy of bacterial cells immobilized by holographic optical tweezers. Nature Communications. 2016;7(1): 13711