The interrelationships between the common stock and stock option markets are investigated in detail through the analysis of price changes and their interrelationships. Data on call option and underlying stock prices are obtained from the Berkeley Options data base for the time period January 1983 through September 1985. Two fundamental issues are investigated in a general analysis of returns rather than a specific analysis of price reactions to information events. The first analysis provides an indication of the lead/lag relationships between the two security markets through the similarity or dissimilarity of the return patterns. Observed stock returns and stock returns implied from call options prices, along with differences between these two series, are investigated for return seasonalities. Dummy variable regressions allow calculation of F statistics that test for differences in returns across trading days and intraday time intervals. Results indicate that there are significant differences in return patterns between observed and implied stock prices. Overnight implied stock returns are slightly larger and do not exhibit the negative weekend effect found in observed stock prices, and observed returns are larger than implied returns early in the trading day. The second issue addressed is that of intermarket efficiency: are profits associated with the lead/lag, relationships identified in the first analysis? Two trading strategies are tested, one assuming that implied stock prices lead observed stock prices and one assuming observed stock prices lead implied stock prices. Several execution lag/holding period combinations provide results indicating that positive profits exist only to the overnight holding periods for the rule that assumes stock price lead implied stock prices. The results of both analyses are consistent with the conjecture that the stock market leads the option market. / Source: Dissertation Abstracts International, Volume: 51-09, Section: A, page: 3167. / Major Professor: David R. Peterson. / Thesis (Ph.D.)--The Florida State University, 1990.

This study reports the results of an investigation of security price formation and financial events using actual trades performed by a special segment of institutional investors. The data consists of the identity of the traders, the purchase and sale dates, and the price and volume of each merger-related and leveraged buyout (LBO)-related transaction made by the 25 largest mutual and 25 largest stock life insurance companies during 1984-1988. The insurance company annual statement provided through the State Insurance Commissioner's office discloses the details concerning each trade. This study is the first of its kind in the finance literature and provides further insight into the trading activities of a special class of informed investors around significant corporate restructuring announcements. Approximately 2,200 merger and LBO-related transactions representing almost $3.5 billion and involving 619 restructurings are identified. The life insurance sample appears to exhibit a superior performance in the selection and timing of target company transactions. About 90\% of the trades are profitable, generating a return premium of around 10\% over a random target selection strategy. In addition, average sale transactions are performed close to the maximum price during the event period as indicated by a Price Efficiency Ratio of 93%. Mutual firms, however, appear to outperform stock firms. Realized returns for mutuals are 38% (103% annualized); stock firms earn 23% (57% annualized). An optimal firm size appears to emerge at the $10 billion to \$20 billion asset level, and $1 billion to \$4 billion equity level. / Tests are performed to control for any confounding between organizational structure and firm size, since most large firms are of the mutual form. The results indicate that a strong relationship exists between organizational structure and returns performance; size has a weak relationship with returns. These observations may be due to a greater willingness by mutuals to invest in riskier, longer-term transactions, a greater capacity for mutuals to attract superior managers, or a greater commitment by mutuals for the acquisition of superior costly information. / Source: Dissertation Abstracts International, Volume: 51-09, Section: A, page: 3169. / Major Professor: James S. Ang. / Thesis (Ph.D.)--The Florida State University, 1990.

A particular feature of financing an LBO transaction is the incorporation of strip financing in which each investor takes a strip of senior debt, junior debt, and equity. Junior debtors who hold a simultaneous ownership of equity and debt have an incentive to postpone a bankruptcy providing the present value of the asset liquidation and earnings at the end of the second period exceeds the value of total debt obligation. This possibility of postponing bankruptcy provides the LBO firm with an extra path of operation through which it can achieve an additional value. / Two models, one for an LBO with strip financing and the other for an LBO without strip financing are built on the basis of the state-preference model to analytically prove two propositions: (1) By incorporating the strip financing into its capital structure, an LBO firm can increase its total value of the firm. (2) By implementing the strip financing, the value of debt of an LBO firm also increases. The implications of the above main results are that the total increment in firm value consists of three components: (1) The bankruptcy costs saved by the postponement of bankruptcy. (2) An additional tax shield due to debt charges and non-debt tax deduction which are created by the postponement of bankruptcy. (3) Value achieved through the continued operation which is made possible by the postponement of bankruptcy. / Source: Dissertation Abstracts International, Volume: 50-03, Section: A, page: 0760. / Major Professor: James S. Ang. / Thesis (Ph.D.)--The Florida State University, 1989.

This dissertation is an investigation of the nature of voluntary corporate restructuring during the period 1971 through 1987. Voluntary restructurings are those types of reorganization where management provides the impetus for the change. In contrast, involuntary restructurings, for example hostile tender offers and leveraged buyouts, are those where an outside party takes an active interest in acquiring the firm. In the sample investigated, it is found that the wealth effect of voluntary restructuring is approximately seven times that of involuntary restructuring. / Two tests are performed: an ex ante test and an ex post test. The purpose of the ex ante test is to document the existence of a restructuring premium and to identify some of the discriminating characteristics of potential self restructuring candidates. The takeover or privatization of a major corporation creates an industry disturbance that results in an indirect threat of takeover for the remaining firms within the same industry. This activity provides the incentive for firms to self restructure. In anticipation of these reorganizations, the market provides a restructuring premium to those firms that it believes has the need, willingness, and ability to reorganize. / Statistically significant, cumulative, abnormal returns of 15% are found to occur over a three year period. Further, these restructuring premiums are found to be greater during the 1980s than during the 1970s. Results indicate that the firms most likely to self restructure are characterized as being large, low risk, older companies with below-average debt/equity ratios. / The ex post test is performed to determine the relative effectiveness of certain organizational strategies. It is found that firms that voluntarily restructured via downsizing (i.e., reducing both assets and debt) and controlling overhead expenses were more successful than firms that did not. In addition, results indicate that companies during the 1980s and those with lower risk were the most lily to reorganize. / Source: Dissertation Abstracts International, Volume: 51-07, Section: A, page: 2475. / Major Professor: James S. Ang. / Thesis (Ph.D.)--The Florida State University, 1990.

The primary purpose of this dissertation is to investigate selected capital structure theories through the study of the effect of preferred stock issuances on the wealth of common shareholders. These theories include the tax hypothesis of Modigliani and Miller (1963), the asymmetric information hypothesis of Myers and Majluf (1984), the signalling hypotheses of Ross (1977), and the growth hypothesis of Heinkel and Zechner (1990). The secondary purpose is to examine the importance of various features of preferred stock. These features include convertibility, callability, and whether the dividend rate is fixed or adjustable. The hypotheses are tested by estimating the wealth effect of the preferred stock issue announcement on the common shareholders and separating the alternative explanations by relating the wealth effect to the characteristics of the issuer and the issue. / This dissertation provides evidence of a significant negative market reaction to the announcement of the issuance of preferred stock. The negative reaction is more pronounced when only non-regulated firms are included in the sample. The market reaction is not significant for a sub-sample of regulated firms. / This dissertation does not support existing capital structure theories. The evidence fails to support the tax hypothesis, the growth hypothesis, the asymmetric information hypothesis, and the signalling hypothesis. There is also insufficient evidence that the use of free cash flows reduces agency costs. Although the inclusion of tax hypothesis variables and growth hypothesis variables contributes significantly to explaining abnormal returns, the signs of the coefficients are opposite of those predicted by theory. Of the features examined, only callability is found to be significant in explaining abnormal returns, but the sign is opposite of that predicted by theory. / The primary contribution of this dissertation is further examination of capital structure theories in the context of preferred stock issuances. There is considerable evidence on the wealth effects of common stock issuance, but little evidence exists on preferred stock. The secondary contribution is a better understanding of the recent changes and growth in the market for preferred stock. / Source: Dissertation Abstracts International, Volume: 56-11, Section: A, page: 4495. / Major Professor: Pamela P. Peterson. / Thesis (Ph.D.)--The Florida State University, 1995.

When there is informational asymmetry between managers and outside investors, managers can use dividend announcements to send signals about a firm's real prospects to outside investors. As dividends need not be directly related to a firm's earnings prospects, dividend signals are indirect messages from managers. / Previous studies have used excess returns to measure the information effects of dividend announcements. Both changes in expected future cash flows and changes in risk influence stock prices so that excess returns provide a clear signal only when the impact of an event is in one direction. However, average excess returns across a sample may not provide evidence on the information effects of an event when both positive and negative impacts occur within the sample. / The information measure developed here relies on information theory and reflects both separate and aggregate impacts of changes in expected values and changes in uncertainty. The empirical analysis uses jointly estimated implied stock prices (ISPs) and implied standard deviations (ISDs) (using call option data in the Berkeley Options Data Base) as measures of expected cash flows and anticipated risk. / The empirical results here support the hypothesized information content of dividend announcements, confirming results of previous studies. ISDs generally decrease and ISPs increase after dividend announcements. When dividend announcements are grouped into unexpected increases, expected increases, and unchanged dividends, increases in ISPs are largest for unexpected increases. The results also indicate that risk decreases or remains unchanged after dividend announcements. This study argues that due to resolution of uncertainty about imminent dividends, risk decreases after dividend announcements; the empirical results support this argument. / Excess returns were regressed on the information measure; results indicate that excess returns are primarily explained by changes in ISPs and that incremental changes in risk are not significantly related to excess returns. / The sample sizes for this empirical study are small. Results of the empirical analyses generally support the hypotheses proposed in the paper, but results are not statistically significant (at $\alpha \leq$.05). / Source: Dissertation Abstracts International, Volume: 52-02, Section: A, page: 0632. / Major Professor: Elton Scott. / Thesis (Ph.D.)--The Florida State University, 1991.

Source: Dissertation Abstracts International, Volume: 35-04, Section: A, page: 1847. / Thesis (D.B.A.)--The Florida State University, 1974.

Source: Dissertation Abstracts International, Volume: 37-01, Section: A, page: 0493. / Thesis (Ph.D.)--The Florida State University, 1975.

Source: Dissertation Abstracts International, Volume: 37-06, Section: A, page: 3795. / Thesis (Ph.D.)--The Florida State University, 1976.

Source: Dissertation Abstracts International, Volume: 36-06, Section: A, page: 3899. / Thesis (D.B.A.)--The Florida State University, 1975.