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Essays on Mergers and Acquisitions

We use increases and decreases in the ranking scores of Fortune’s Most Admired Companies to test the proposition that media shocks can increase (decrease) the value of a manager’s reputational capital and, thus, enhance (diminish) his power to extract corporate resources for private benefit at the expense of shareholders. Consistent with the proposition increases (decreases) in scores are associated with stock price decreases (increases). And, CEOs whose firms experience increases (reductions) in scores experience increases (reductions) in compensation and in job tenure, and their firms undertake more (fewer) acquisitions and the acquisitions are less (more) value increasing. Prior Literature has emphasized the costs financial distress imposes on a firm. In this study, I examine a potential benefit financial distress can provide a firm, aligning the interests of managers and shareholders. I find that financially distressed firms see a 3.5% higher market reaction to the announcement of acquisitions than non-distressed firms. This effect is stronger for poorly governed firms, consistent with the hypothesis that the large reputational cost of failure incentivizes managers to act in the best interest of their firm. / A Dissertation submitted to the Department of Finance in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Spring Semester 2018. / April 6, 2018. / Includes bibliographical references. / Yingmei Cheng, Professor Directing Dissertation; Tom Zuehlke, University Representative; Don Autore, Committee Member; Baixiao Liu, Committee Member.
ContributorsRosenblum, Aaron (author), Cheng, Yingmei (professor directing dissertation), Fendler, Rachel Loveitt (professor directing dissertation), Zuehlke, Thomas W., 1957- (university representative), Autore, Donald M. (committee member), Liu, Baixiao (committee member), Florida State University (degree granting institution), College of Business (degree granting college), Department of Finance (degree granting departmentdgg)
PublisherFlorida State University
Source SetsFlorida State University
LanguageEnglish, English
Detected LanguageEnglish
TypeText, text, doctoral thesis
Format1 online resource (89 pages), computer, application/pdf

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