This thesis presents an empirical investigation of the role of competition in determining (1) bidder firm behaviour in, and (2) the resulting valuation effects of, corporate takeovers. The study is based on the most comprehensive sample currently available of interfirm tender offers for publicly traded U. S. target firms during the period 1971-1990. Corporate takeover contests differ in complex ways with respect to the asymmetric information and bargaining environment, distributions of bidder reservation values and target share ownership, and information acquisition costs. There is substantial theoretical work examining the strategic role of the choice of payment method, bidder elimination and target management resistance, and of particular interest in this thesis, pre-bid acquisition of target shares ("toehold") and its impact on the subsequent tender offer price. Despite a voluminous empirical literature on corporate acquisitions, systematic evidence on the extent and role of bidder toeholds on bidding strategies is sparse. While the toehold has been shown to be prevalent in takeover contests, the extant empirical literature contains few results pointing to the strategic role suggested by theory. The lack of statistical significance may reflect a combination of small samples, weak experimental design, and biases in estimation. This thesis remedies the small sample problem by examining more than 1350 takeover contests in the U. S. from 1971 to 1990. The experimental design is improved by including a larger set of sample controls, and addressing the bias issue by estimating a set of equations which simultaneously determines the toehold and the takeover premium. The wealth effects of takeover contests are estimated as a function of toeholds, the number of bids/bidders, the outcome of the bid, and the target management response. Other empirical issues, including the effect of toeholds on the probability of target management resistance and emergence of a second bid in the contest, are also examined. Finally, a new econometric technique is developed for simultaneously estimating event probabilities and conditional expected event returns in order to determine whether entering the takeover auction, and responding to rival bids for the target shares, on average enhances the wealth of the initial bidders' shareholders.

Thesis (Ph. D.)--University of Hawaii at Manoa, 1996. / Includes bibliographical references (leaves 371-386). / Microfiche. / vii, 386 p. leaves, bound 29 cm

In part 1 of this study I examine several models of competitive markets in which a group of uninformed traders uses the equilibrium price of a traded asset as an indirect source of information known to a group of informed traders. Four different models are compared in two homogeneous information cases plus one asymmetric information case, revealing a) an allocative efficiency benefit resulting from the opportunity to trade current consumption for future consumption, b) a 'dealer' benefit accruing to traders who are able to observe and act on demand fluctuations not apparent to other traders, c) a 'hedging' benefit accruing to all traders, and d) a loss of hedging benefits due to information dissemination before hedge trading can take place. The effect of an increase in precision of information given to informed traders is calculated for the above factors and for net welfare. In part 2, a two-factor model using the instantaneous rate of interest and the return on a consol bond to describe the term structure of interest rates - the Brennan-Schwartz model - is used to derive theoretical prices for American call and put options on U.S. government bonds and treasury bills. These model prices are then compared with market prices. The theoretical model used to value the debt options also provides hedge ratios which may be used to construct zero-investment portfolios which, in theory, are perfectly riskless. Several trading strategies based on these 'riskless' portfolios are examined. / Business, Sauder School of / Graduate

This thesis presents an empirical investigation of the role of competition in determining (1) bidder firm behaviour in, and (2) the resulting valuation effects of, corporate takeovers. The study is based on the most comprehensive sample currently available of interfirm tender offers for publicly traded U. S. target firms during the period 1971-1990. Corporate takeover contests differ in complex ways with respect to the asymmetric information and bargaining environment, distributions of bidder reservation values and target share ownership, and information acquisition costs. There is substantial theoretical work examining the strategic role of the choice of payment method, bidder elimination and target management resistance, and of particular interest in this thesis, pre-bid acquisition of target shares ("toehold") and its impact on the subsequent tender offer price. Despite a voluminous empirical literature on corporate acquisitions, systematic evidence on the extent and role of bidder toeholds on bidding strategies is sparse. While the toehold has been shown to be prevalent in takeover contests, the extant empirical literature contains few results pointing to the strategic role suggested by theory. The lack of statistical significance may reflect a combination of small samples, weak experimental design, and biases in estimation. This thesis remedies the small sample problem by examining more than 1350 takeover contests in the U. S. from 1971 to 1990. The experimental design is improved by including a larger set of sample controls, and addressing the bias issue by estimating a set of equations which simultaneously determines the toehold and the takeover premium. The wealth effects of takeover contests are estimated as a function of toeholds, the number of bids/bidders, the outcome of the bid, and the target management response. Other empirical issues, including the effect of toeholds on the probability of target management resistance and emergence of a second bid in the contest, are also examined. Finally, a new econometric technique is developed for simultaneously estimating event probabilities and conditional expected event returns in order to determine whether entering the takeover auction, and responding to rival bids for the target shares, on average enhances the wealth of the initial bidders' shareholders. / Business, Sauder School of / Graduate

This paper is an evaluation of the efficiency of the Government National Mortgage Association (GNMA) mortgage-backed securities market. GNMA securities represent a $702 billion market. Despite this size, the securities do not trade on an organized exchange. Trading on an organized exchange implies that a maximum amount of available information is incorporated into prices. Consequently, can the GNMA market be efficient? An efficient market, as posited by Eugene Fama and others, is one where all of the information available in a market is incorporated in the prices in that market. There are various levels of efficiency ranging from the use of all publicly available information to the use of that information plus information not generally available (i.e. proprietary and "insider" information".) This paper considers the more general case of information available in period t not being used in that period but rather being incorporated in the prices of period t+n. The analysis uses monte carlo simulation to generate paths of discount rates based on the yield curve for U.S. Treasury securities. These periodic rates along with a common spread are used to discount the estimated cash flows on the GNMA securities. The common spread is termed the Option Adjusted Spread ("OAS") and is postulated to incorporate all of the market information over and above that is used in setting prices (and their corollary, yields) in the Treasury market. The test of market efficiency is whether or not the prices in period t are correlated with the OAS of a subsequent period. / Master of Arts

This study uses the tools of accounting research in an exploratory examination of American Depositary Receipts (ADRs). ADRs are registered certificates that represent specified amounts of foreign stocks held in trust by the banks issuing the ADRs. They are used to avoid the day-to-day problems created by international securities transactions. The empirical portion of this study considers three research areas linking ADRs and accounting. The first question considers whether ADR firms show financial accounting information that is characteristically different from that for non-ADR firms. The major conclusion is that corporate size is the predominant distinguishing factor. The second question is whether the portion of the periodic returns on ADR investments caused by foreign currency exchange effects is significant. The major conclusion to this section is that foreign exchange effects can significantly affect ADR returns, but not in a consistent manner. The third area examines whether ADR returns are more closely correlated with the American markets on which they trade or with the foreign markets on which their underlying shares trade. This portion of the study shows that every possible correlation combination exists among the sample ADRs. In addition to considering these empirical questions, this study includes a thorough historical investigation of the origin and evolution of the ADR as a financial instrument. / Ph. D.

Theoreticians and practitioners consider regulation of the capital marketplace to be an important area of concern due to the potential effects of such regulation on capital resource allocation, investment decision-making, and market efficiency. It is hypothesized that if the level of issue quality required by a state prior to public sale supplies investor benefits, such benefits should take the form of excess returns and/or less variation in return in relation to issues complying with lower standards of quality. The study utilizes an Analysis of Variance and, an analysis of average and cumulative average residuals. Both investigations provide findings that merit regulation is beneficial to new investors increased market efficiency.

This dissertation examines several research questions relating to securitization by non-financial firms. Finance theories suggest securitization is most beneficial when there is high demand for liquidity. On the other hand, empirical studies have shown that firms engage in securitization to manage earnings. I find that liquidity demand, not the incentive for earnings management motivates securitization transactions by non-financial firms. I also evaluate whether earnings management in securitization is indeed undesirable from a shareholder's perspective by examining the economic consequences of the practice. Because securitization creates a large infusion of cash, one way to evaluate the economic consequences of earnings management is to examine whether securitization proceeds encourage overinvestment. I find that earnings management in securitization (i.e., recording non-zero securitization income) is unrelated to firms' suboptimal) overinvestment in the post-securitization period. Thus, it appears that earning management in securitization has no negative economic consequence in terms of generating excess securitization proceeds that encourage overinvestment. I also examine the market's valuation of securitizable assets in the accrual components of earnings and the use of securitization proceeds. Because securitizable assets can be converted into cash through securitization, I test whether the market valuation reflects the source of liquidity in securitizable assets that is similar to the cash component of earnings. I find that, for securitization firms, the market valuation of securitizable assets is similar to that of the cash component of earnings. / Lastly, I find some evidence supporting the assertion that firms' liquidity prior to securitization influences the market valuation on securitization proceeds retained on the balance sheet, in that the market assigns a discount to retained proceeds for firms with excess liquidity prior to securitiaztion. / by Qianyun Huang. / Thesis (Ph.D.)--Florida Atlantic University, 2011. / Includes bibliography. / Electronic reproduction. Boca Raton, Fla., 2011. Mode of access: World Wide Web.

Xu, Lin. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2013. / Includes bibliographical references (leaves 128-131). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese.

Note: / This thesis is a critical analysis of the law relating to insider trading in three common law countries. Chapter One, addresses the merits and demerits of the regulation of insider trading and presents a review of the academic literature relating to this field. In Chapters Two, Three and Four, the law ofinsider trading in the United States, Canada and the United Kingdom is analysed and discussed on a comparative basis. Each of these chapters is in two sections. The tirst section describes the regulatory system and institutions, and the second section discusses the regulation of insider trading, highlighting the critical elements ofthis type ofregulation, such as the definition of an 'insider' and the scope of 'inside infonnation'. It concludes with a broad discussion of the differing approaches ofthese countries to insider trading. Cette thèse est un analyse critique du délit d'initiés dans trois pays 'common law'. / Dans le premier chapitre, on discute les avantages et les inconvénients de la réglementation du délit d'initiés et la littérature academique rélatif à ce sujet. Dans les Deuxième, Troisième et Quatrième Chapitres on analyse et compare le droit concernant le délit d'initiés dans les Etats-Unis, le Canada et le Royaume-Uni. Chacun de ces chapitres comprend deux parties. La première partie décrit le système réglementaire et les institutions. La deuxième partie discute le droit du délit d'initiés et les éléments critiques de ce droit (par exemple, le définition d'initié et d'information privilegiée). La Conclusion discute les approches différents de ces trois pays quant au délit d'initiés.