Thesis (Ph. D.)--University of Missouri-Columbia, 2001. / Typescript. Vita. Includes bibliographical references (leaves 80-85). Also available on the Internet.

Includes bibliographical references.

Thesis (Ph. D.)--University of Missouri-Columbia, 2001. / Typescript. Vita. Includes bibliographical references (leaves 80-85). Also available on the Internet.

Accounting information is an integral part of the information set used by investors. However, accrual based accounting earnings are susceptible to earnings management. Investors are concerned about earnings management since earnings management can distort reported earnings and they may make decisions that they otherwise would not have made. The purpose of this thesis is to examine the impact of earnings management on the informativeness of reported earnings about firm value and analysts' forecasts. Chapter 2 develops an earnings management model and examines the impact of earnings management on income smoothing and the earnings response coefficient. Chapter 3 critically reviews the existing discretionary accrual models and discusses the measurements of earnings management and income smoothing, which are used in the subsequent empirical chapters. Chapter 4 empirically examines the impact of earnings management on the earnings response coefficient after controlling either for the smoothness of pre-managed earnings or for the smoothness of reported earnings. Firms are further decomposed into income smoothing and variance-increasing earnings management firms and the same analyses are repeated. Chapter 5 examines the impact of smoothness of reported earnings and earnings management on the equilibrium demand for analysts' services and the properties of analysts' forecasts. This thesis contributes to our understanding of the impact of earnings management on firm value and analysts' forecasts by providing empirical evidence consistent with the hypothesis that the financial market and analysts are aware of the nature of a firm's discretionary accrual policy, and use their beliefs about the firm's discretionary accrual policy in assessing firm value and deciding whether to follow the firm.

This thesis is comprised of three essays dealing with outside directors. The first essay addresses the signaling role that outside directors play. This is a role that is especially important for entrepreneurial firms, and has been relatively neglected in corporate governance research. The primary contribution of this chapter is in developing an analytical model and predictive framework on which future empirical and analytical research on directors' signaling role can be based. This chapter also contributes to the signaling theory literature by deriving a new type of equilibrium — the "stochastic separating equilibrium" — which may well be applicable in a broader set of models that incorporate signaling through middlemen. This equilibrium has an important realistic feature in that it permits the coexistence of both high and low quality firms in equilibrium. In the second study, I address directors' monitoring role. This essay examines whether a systematic relationship exists between a board's composition and discrete strategic decisions of a firm, which have been addressed in the literature as involving potential conflicting interests between managers and shareholders. To explore this question, I conducted seven meta-analyses of relevant strategic decisions, on which I could obtain data. The results provide evidence for the presence of systematic relationships between a board's composition and five out of the seven strategies examined. Interestingly, these systematic relationships provide only limited support to the predictions of agency theory, which is the predominant rational behind this line of research. In the third essay, I examine the effects of outside directors' stock-based compensation on one indicator of board monitoring effectiveness: firms' research and development (R&D) intensity. The results suggest that both the percentage of stock-based compensation and the proportion of stock options within it are positively related to firms' R & D expenditures. Moreover, stock-based compensation moderates the relationship between board composition and R & D intensity. These results highlight the need to reevaluate previous findings that addressed the effects of board composition on both firm performance and firm strategic decisions.

The primary purpose of this study was to establish on whether South African taxpayers have an in-depth understanding of taxation. In particular, an understanding on the requirements on taxation on companies and directors in relation to normal tax, secondary tax on companies and lastly, piercing of any possible veil. The population was from the North-West Province with particular inclination to the Mafikeng area. Sixty nine respondents participated in the study after random selection. The questionnaire was the primary instrument of data collection for this study. The data was presented in tables and graphs and analysed using the F-Tests and T-Tests. The responses of directors of companies as opposed to non-directors were what one could safely term unsurprising in that it was, so to speak, what was ordinarily expected; that is, the responses showed that directors had more knowledge regarding tax matter than non-directors. This could be attributed the farmer's everyday exposure tax matters. Stemming from this, it is recommended that a lot of education needs to be done on the part of non-directors in order to familiarise them with tax-related issues. Further, it is recommended that the language used in the tax field be made more accessible so that any taxpayer could understand it. / (MBA) North-West University, Mafikeng Campus, 2005

This dissertation comprises three essays. In the first essay, I develop a contingent-claims model to investigate the impact of managerial entrenchment on corporate policies and security valuation. The model emphasizes the role that managerial agency issues play in determining both a firm's dividend payout and capital structure. I show quantitatively that self-interested managers' leverage choices deviate from those ex ante maximize firm values. The results suggest that dividend yields are negatively affected by both leverage ratios and managerial entrenchment. They provide implications for empirical research attempting to relate dividend policy to capital structure. In addition, the model offers a new framework to measure managerial entrenchment using observed leverage and dividend payout. / In the second essay, we use a set of structural models to evaluate the price of default protection for a sample of US corporations. In contrast to previous evidence from corporate bond data, CDS premia are not systematically underestimated. In fact, one of our studied models has little difficulty on average in predicting their level. For robustness, we perform the same exercise for bond spreads by the same issuers on the same trading date. As expected, bond spreads relative to the Treasury curve are systematically underestimated, consistent with their being driven by significant non-default components. This is not the case when the swap curve is used as a benchmark, suggesting that previously documented underestimation results may be sensitive to the choice of risk free rate. / In the third essay, we develop a valuation model that simultaneously captures credit risk and interest rate risk, and apply it to study the valuation of putable corporate bonds. We ask what risks put features provide insurance against in practice - credit risk, liquidity risk or interest rate risk - and to what degree? We find that they reduce the components of all three risks in bond spreads. The most important, perhaps surprisingly is default or spread risk, followed by term structure risk. The reduction in the liquidity component is present but rather small.

There are substantial bodies of literature that advance theory about why Merger and Acquisition (M and A) candidates are found to be unattractive, why negotiations aren???t concluded and why the benefits of companies that are acquired are not realized. Little, if any, research identifies why M and A opportunities are not pursued in the period after candidates are analysed and found to be attractive but before negotiations begin. This study addresses this period by developing a theoretical framework of the variables that intervene to reverse decisions to pursue apparently attractive candidates before negotiations begin and which, in doing so, result in missed opportunities. The study is informed primarily by the Strategic Management content literature (Ansoff, 1965, Porter, 1980) but draws from the strategy process literature (Huff and Reger, 1987) including streams in Strategic Decision Making (SDM) (Papadakis and Barwise, 1998, Schwenck, 1995). The framework is developed using a multiple-case study method. This choice was dictated by the study???s theory building objective, the nature of the research questions ??? that is, what variables influence decisions and how? ??? and the lack of an existing theoretical foundation on which to build. The sample consisted of 37 decisions reversals made by 27 firms in Australia, Europe and the USA. The results suggest that there are three major categories of variables that stop acquirers from pursuing potentially attractive acquisition candidates. These are related to the acquirers???: ??? Strategy and objectives: For example, whether there is a change in strategy or objectives, or either or both are poorly understood and agreed between organizational levels or units; ??? Organizational functional resources: For example, whether constraints on appropriate knowledge and skill sets develop or are perceived to be likely to develop during the post-evaluation period; ??? Other financial factors: For example, whether a shortage of funds develops. Twelve individual variables are identified. Ten of these appear to be consistent with factors that Ansoff and colleagues (1971) associate with post-acquisition failure although variable definitions are not always comparable. Poor management of the variables thus appears to have the potential to expose acquirers to two different but important vulnerabilities. First, potentially attractive M and A opportunities may be forgone if the variables are operative in the post-evaluation ??? pre-negotiation period; second, if they don???t become operative until after the acquisition is consummated, the benefits of attractive companies that are acquired may not be realized. This study???s most important contribution is to the theoretically diverse base of acquisition performance literature which, to-date, tends to examine phases in the M and A decision making process before or after the focal period of this study. It also illustrates the use of a general multi-theoretic model of Strategic Decision Making (Rajagopolan, et al., 1993, 1998) exclusively in the M and A domain, a domain whose decisions are worthy of study in their own right. Finally, it provides insights into a new set of factors subject to control that managers may take into account in their acquisition planning.

Thesis (Ph. D.)--Washington State University, August 2008. / Includes bibliographical references (p. 95-103).

Thesis--Auburn University, 2008. / Abstract. Vita. Includes bibliographical references (p. 44-47).