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Utilizing firms in the S&P 500, we study whether greater transparency in the reporting of other comprehensive income (OCI) items, as mandated by ASU 2011-05, resulted in a reduction in information asymmetry, a change in the value relevance of this information, or a change in hedging practice. Our results show that while transparent reporting reduced information asymmetry, firms that engage in cash flow hedging do have greater information asymmetry than their counterparts that do not hedge. We find evidence that investors penalize firm value for greater volatility of OCI relative to net income volatility when reported transparently. When permitted, managers were able to mitigate the negative impact by reporting OCI only in the Statement of Shareholders' Equity. We conclude that managers' concerns regarding potential confusion surrounding OCI volatility following more prominent reporting led to changes in hedging behavior. After transparent reporting, we find a reduced likelihood of foreign currency cash flow (FXCF) hedges and a reduced level of FXCF hedging among firms experiencing the greatest volatility of unrealized hedging gains and losses. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to test whether the extent of compliance with International Financial Reporting Standards (IFRS) 7 requirements is value relevant and whether it influences the value relevance of the firm's accounting information (book value of shareholders' equity and net income). Design/methodology/approach: The sample for this paper consists of 288 financial institutions listed on the Toronto Stock Exchange (TSX) from 2016 to 2019. Panel regressions have been used in this study. Findings: The findings reveal that compliance with IFRS 7 is positively associated with the firm's market value. After making a classification between high-compliance and low-compliance companies, the authors' results indicate that the compliance level is positively associated with the value relevance of net income. Surprisingly, when examining the value relevance of financial instruments disclosures (FID) supplied after the adoption of IFRS 9, the authors find that book values of shareholders' equity and earnings are not more value relevant in the post-IFRS 9 period. Research limitations/implications: Given that the authors' analysis has been restricted to the Canadian setting, the regression results might not be generalized for other countries with different capital markets features. Practical implications: The authors' findings point out that FID can affect investors' decisions as well as their confidence in the companies in which they invest. Hence, the regulatory bodies should gear more efforts to ensure high-compliance levels. Originality/value: To the best of the authors' knowledge, this research is among the first attempts to investigate whether the new FID (after the adoption of IFRS 9) improves the firm disclosure quality and enhances the value relevance of accounting information. [ABSTRACT FROM AUTHOR]

Faster attainment of optimal financial leverage guarantees the company's survival and the growth of shareholders' interests. This paper investigates the effect of family ownership on the speed of adjustment of financial leverage toward optimal leverage. The data of 133 companies listed on the Tehran Stock Exchange, selected according to the systematic exclusion pattern, was collected for 10 years from 2012 to 2021 to achieve the research objectives. A multivariate linear regression model was used to test the research hypotheses. In order to measure the speed of adjustment of financial leverage, the partial adjustment pattern model of Öztekin (2015) has been used, and to evaluate the Family Ownership, Chen et al. (2008) method was used. The results showed that the speed of adjustment of financial leverage towards optimal leverage in family companies is faster than in non-family companies. Therefore, family owners in companies with a higher sense of responsibility towards the company's capital can create a safe environment for investors and ensure a return on their investment. [ABSTRACT FROM AUTHOR]

Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people via the internet. Capital Markets Board has regulated equity-based crowdfunding in Communique III-35/A.1. Equity-based crowdfunding offers investors a share of the profits or return of the business they are helping to fund. Equity-based crowdfunding allows contributors to become shareholder of the company and equity owners receive a share of the profits in the form of a dividend. The new regulation regarding crowdfunding provides an exemption from the preparation of prospectus or an issuance certificate. Collecting money from the public through crowdfunding shall be carried out by the crowdfunding platforms that are authorized by the Capital Markets Board. Communique III-35/A.1 regulates the principles and procedures applicable to crowdfunding platforms, new shares which can be created by means of a capital increase, share transfers, maximum funding limits of each funder or the limits of the money to be collected to the fund by project owners etc. This article offers information and observations about this regulation. [ABSTRACT FROM AUTHOR]

Unrealized gains and losses on available-for-sale securities (AFSGL) are included in Other Comprehensive Income (OCI) and directly affect shareholders' equity but are not included in earnings. We investigate whether unrealized AFSGL help predict future earnings and whether analysts and investors incorporate the information conveyed by unrealized AFSGL in a timely manner. We conduct our investigation on a sample of banks because unrealized AFSGL are material in the banking industry. First, we show that unrealized AFSGL are material and help in predicting next period realized AFSGL and future earnings change. Second, we document that financial analysts are slow to react to unrealized AFSGL and update their forecasts after AFSGL are realized in earnings. Third, we find that investors are also slow to react to unrealized AFSGL and do so only after AFSGL are included (realized) in earnings and after financial analysts update their forecasts. We document an annual difference of 5% in future abnormal returns between banks in the top and bottom quintiles of past unrealized AFSGL. A zero-cost trading strategy that relies on public information about unrealized AFSGL generates a sizeable monthly alpha that ranges between 1.8% and 1.9%. [ABSTRACT FROM AUTHOR]

This paper addresses whether the adoption of Japanese financial practices by U.S. corporations can be used as a basis for encouraging U.S. managers to promote the interests of their (human) organizations over those of stockholders. An historical overview is provided of how the corporate organization in each country evolved and the corresponding development of managers' responsibilities to the corporate organization versus shareholders. These concepts are then examined within the context of each country's contemporary corporate financial structure and the corresponding financial responsibilities of managers to the corporate organization versus shareholders A discussion is then provided of whether the values embodied in each system would affect the ability of the United States to encourage a more "corporate-oriented" ethic to its managers by adopting Japanese financial practices. [ABSTRACT FROM AUTHOR]

This paper examines the consequences of symbolic action in corporate governance. Specifically, we examine (1) whether the stock market reacts favorably to specific governance mechanisms that convey the alignment of CEO and shareholder interests, Such as the adoption of long-term incentive plans (LTIPs), even if such plans are not actually implemented, (2) whether providing agency-related explanations for LTIPs affects the stock market response, and (3) whether the symbolic adoption of LTIPs deters other governance reforms that would reduce CEO's control over their boards. Analysis of data for over 400 corporations over a ten-year period suggests that symbolic corporate actions can engender significant positive stockholder reactions and deter other, more substantive governance reforms, thus perpetuating power imbalances in organizations. We discuss implications for institutional and agency-based perspectives on organizations. [ABSTRACT FROM AUTHOR]

We investigate the source of stockholder gains in going private transactions. We find support for the hypothesis advanced by Jensen that a major source of these gains is the mitigation of agency problems associated with free cash flow. Using a sample of 263 going private transactions from 1980 through 1987, our results indicate a significant relationship between undistributed cash flow and a firm's decision to go private. In addition, we find that premiums paid to stockholders are significantly related to undistributed cash flow. These results are especially strong for firms that went private between 1984 and 1987 and also for firms whose managers owned relatively little equity before the going private transaction. [ABSTRACT FROM AUTHOR]

Recent empirical research has identified a significant amount of volatility in stock prices that cannot easily be explained by changes in fundamentals; one interpretation is that asset prices respond not only to news but also to irrational “noise trading.” We assess the welfare effects and incidence of such noise trading using an overlapping-generations model that gives investors short horizons. We find that the additional risk generated by noise trading can reduce the capital stock and consumption of the economy, and we show that part of that cost may be borne by rational investors. We conclude that the welfare costs of noise trading may be large if the magnitude of noise in aggregate stock prices is as large as suggested by some of the recent empirical literature on the excess volatility of the market. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to investigate the combined effect of dividend policy and new equity financing decisions on the market value of the firm's common stock. Some basic aspects of a conceptual framework are explored, and empirical tests are performed with year-end 1968 cross sections for two industries, using a well-known valuation model. The results must be considered exploratory, but the method of analysis should prove useful in future investigations. [ABSTRACT FROM AUTHOR]

This paper examines the market response of the reverse stock splits by using the effective date to trace the abnormal returns after reverse splits over the period of 1981 to 2010:3. The findings show that the short-term behavior of the abnormal returns on the effective date is negative and highly significant for all firms. The abnormal returns on the effective month are negative and highly significant. As expected, the cumulative abnormal returns are negative and significant at 10 % level over the period of +1 to +12 months. However, the cumulative abnormal returns from month +13 to month +36 are significantly positive. Our findings also support that institutional investors show confidence by increasing mean holdings of reverse splits of large capital stocks. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Unternehmens- und Gesellschaftsrecht is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article discusses the role of capital controls, including exchange controls affecting current transactions, as a crisis policy response. The International Monetary Fund (IMF) must consider approving nondiscriminatory exchange controls affecting current international transactions on a temporary basis in times of crisis for financial stability. However, the use of exchange controls as a crisis response tool are likely to be limited and is not helpful for countries to further restrict their freedom of movement through free-transfer clauses without balance-of-payments safeguards in bilateral investment treaties. Meanwhile, foreign investors sought to move capital invested in a range of emerging-market economies into safe havens in the early stage of the crisis.

The article discusses the study which determines the importance of the principal-agent model in corporate governance for modern corporations. It demonstrates that some managers serve as common agents of several types of investors that face the reality of corporate relationships where vertical and horizontal incentive problems can arise. It implies that dequity contracts can better solve corporate problems on debt and equity than resulting in legal and contractual remedies.

The article discusses the study which examines the enlightened shareholders value that intersects with corporate governance rules. It explores the confluence of market and regulatory changes that empowers investors to have greater influence in decision making as shareholders. It implies that the enlightened shareholder value represents an alternative vision with theoretical and normative advantages beyond the shareholders' rising activism for wealth maximization.

The main agency problem in the Chinese economy comes from a conflict between strong controlling shareholders and weak minority shareholders. In such economy, seasonal equity offerings (SEOs) are used as a means to exploit minority shareholders. This paper examines the effects of a regulation (the classified voting system [CVS]) that attempts to protect the interests of minority shareholders by excluding controlling shareholders from the voting process of SEOs. This results show that the rejection rate significantly increases after the CVS comes into effect. SEOs proposals are more likely to be rejected when perceived private benefits are high and security benefits are low, and when minority shareholders have higher bargaining power. Further, investors receive significantly higher post-SEO stock returns for SEOs approved under the CVS than for those approved before the CVS. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Unternehmens- und Gesellschaftsrecht is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study focuses on a possible mediation by communication in the identification-organizational performance and identification-corporate reputation relationships. The review of the literature indicates that (a) companies with good reputations have better performances, (b) the stronger employee identification is, the better the reputation and performance, and (c) communication plays an important role in emphasizing the mode in which the organization presents itself to its stockholders. This study reveals that communication is a partial mediator in the relationships studied, suggesting that managers early on establish the form of communication, emphasize to a greater degree managerial communication, and not concentrate all their attention on marketing communication. The study involved 1,025 employees in various organizations and applied modeling of structural equations and the method proposed by Baron and Kenny (1986) to evaluate the mediation between the variables. [ABSTRACT FROM AUTHOR]

This article empirically examines the relationship between insider (entrepreneurs and venture capitalists) trading and underpricing and long-run performance in a sample of 120 initial public offerings (IPOs) that took place on the Nouveau Marche in France during the high-tech bubble. We hypothesize that insiders were better informed than the market about the future prospect of the firms, particularly during the high-tech bubble characterized by strong information asymmetry. Trading activity was measured at the IPO date and over a three-year period after this date. We find no evidence suggesting that entrepreneurs and venture capitalists knowingly issue overvalued equity at the IPO date. However, there is weak, but statistically significant, evidence that suggests that entrepreneurs and venture capitalists acquire private information during the first years of flotation and have the ability to take advantage of it by selling overvalued equity. Both these types of insider seem to be the best informed on the future value of the firm. However, changes in ownership of banks and other shareholders are not followed by significant change in the firm's long term value. [ABSTRACT FROM AUTHOR]

The article discusses the reaction of the author on the claim of Professor Kent Grennfield regarding corporate law. The author emphasizes that the claim of Greenfield in corporate law is broken because it is shareholder-centric. He stresses the importance to include non-shareholder constituencies of the corporation for the improvement of the law. He notes that Greenfield's vision of corporate law would destroy the proven effective systems of corporations.

The article focuses e-proxy and its significant role on corporate governance. It relates on a current debate over shareholder's access to the issuer's proxy statement for the overstatement of the issue on making director nominations. It also several related information that need to be examined, including a brief account on shareholder's access to the issuer's proxy statement and on the proxy rules that needs to be focused. In the end, it recommends that the institutional investors and other shareholder activists should be working more through the mechanics of waging short slate proxy competition by using e-proxy solicitations.

Is it too much to pay target firm shareholders a 50% premium on top of market price? Or is it too much to pay a 100% premium when pursuing mergers and acquisitions? How much is too much? In this paper, we examine how the extent of merger premiums paid impacts both the long-run and announcement period stock returns of acquiring firms. We find no evidence that acquirers paying high premiums underperform those paying relatively low premiums in three years following mergers, and the result is robust after controlling for a variety of firm and deal characteristics. Short term cumulative abnormal returns are moreover positively correlated to the level of the premium paid by acquirers. Our evidence therefore suggests that high merger premiums paid are unlikely to be responsible for acquirers' long-run post merger underperformance. [ABSTRACT FROM AUTHOR]

The article examines the capital gain issue on equity risk premiums found in five countries including Australia, France, Germany, Great Britain and the U.S. It presents a brief survey of the issue and contrasts ex-ante measures of stock returns. The study was conducted on two time period from 1989-1999 and 1989-2004. It is concluded that the stock investors at the end of the 1990s benefited from huge unanticipated capital gains.

The stock companies is the most complex and evolved form of company, able to gather the greatest funds and act in the most important areas of activity. Because of the important contribution to the constitution of registered capital and blurring the personal qualities of the stockholders, the stock is also known as joint stock company. This type of company is dedicated to the achievement of great business with great funds. The company is conceived in such a manner as to be able to drain the modest fund contributions for developing great funds, needed for realizing great investments. [ABSTRACT FROM AUTHOR]

The authors propose a chain of effects framework for understanding how customer lifetime value (CLV) affects shareholder value (SHV). In the chain of effects framework, the authors propose that CLV serves as an intermediary in the relationship between firm actions and SHV. They also introduce the notion of the ‘prescient’ value of CLV called CLV-P, which captures the impact on CLV from future modifications to a firm's business model as well as competitive reactions. Finally, they identify econometric and data-related challenges in establishing the link, which suggest directions for future research. [ABSTRACT FROM AUTHOR]

We examine abnormal returns around the announcement of antitakeover amendment proposals for evidence on variation in the effectiveness of monitoring by outside stockholders. The evidence suggests that the market views large stockholders who are outsiders but have potential business ties to a firm (affiliated blockholders) as less effective monitors than other outside blockholders (unaffiliated blockholders). Abnormal returns tend to be lower at firms where holdings of affiliated blockholders exceed holdings of unaffiliated blockholders than at firms where the reverse is true. The difference in the stock ownership of these two classes of blockholders explains more of the variation in abnormal returns than factors such as management stock ownership and board composition. The evidence for affiliated and unaffiliated block- holders is consistent when we focus on the relation between abnormal returns and institutional ownership. No evidence is found of systematic variation in the effectiveness of monitoring by institutional stockholders who are not blockholders. [ABSTRACT FROM AUTHOR]

We analyze the optimal trading and ownership policy of a large shareholder who must trade off diversification and monitoring incentives. Without commitment, the problem is similar to durable goods monopoly: the share price today depends on expected future trades. We show that the large shareholder ultimately trades to the competitive price-taking allocation, even though it entails inefficient monitoring. With continuous trading, the large shareholder trades immediately to this allocation if moral hazard is weak enough that her private valuation of a share is decreasing in her stake. Otherwise, the large shareholder adjusts her stake gradually. We consider implications for asset pricing, IPO underpricing, and lockup provisions. [ABSTRACT FROM AUTHOR]

Stakeholder theory was utilized in this empirical study of resident attitudes toward tourism. Full time and part time residents differed in terms of their perceptions of what was at stake with regard to living in a popular tourist destination. Four stakeholder groups were identified with members identifying three types of stakes: equity, economic, and influencer. [ABSTRACT FROM AUTHOR]