The Firm

Information, Disclosure, and the Cost of Capital Richard Lambert* The Wharton School University of Pennsylvania Christian Leuz The Wharton School University of Pennsylvania Robert E. Verrecchia The Wharton School University of Pennsylvania September 2005 Revised, March 2006 Abstract In this paper we examine whether and how accounting information about a firm manifests in its cost of capital, despite the forces of diversification. We build a model that is consistent with the CAPM…

t We present a framework and empirical evidence to explain why, on average, 11% of listed firms in China received modified audit opinions (MAOs) between 1992 and 2009. We argue that there are two reasons for this phenomenon: strong earnings management incentives lower firms’ financial reporting quality and soft budget constraints weaken the information and governance roles of audit opinions. We find that firms’ financial constraints eased after receiving MAOs, which suggests that MAOs have…

56 The Agency Advantage, of Debt Over the Lifecycle of the Firm Ed VOZ Carolyn FORLONG University of Waikato Department of Finance Private bag 3105 Hamilton, NEW ZEALAND Phone: (64) 7 856-2889 Fax: (64) 7 838 4145 Abstract The question of an 'optimal' capital structure of a firm has been studied for publicly listed businesses. Agency theory has emerged as a good way to explain why firms pick their capital structure. This paper empirically examines the role that agency theory plays in…

Massachusetts echnology strategy variables tend to predominate as predictors of survival in the fastchanging rigid disk drive industry. Building on these previous studies, we here test the hypothesis that the technological and market strategies of a new entrant are highly interrelated and that their joint effect plays an important role in a firm’s probability of survival. In particular, we propose that firms that target new market segments with an architectural innovation will tend to…

RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. For…

The fact that people have unlimited wants means that, they always want more of at least one good. Because people’s wants are unlimited but resources are scarce, choices must be made. A resource is something that is used to produce goods and services. The expression there is no such thing as a free lunch means, that resources used up in producing the lunch are not available to satisfy other wants. Melissa is self-employed lawyer who choose a higher priced restaurant 2 miles from home, the higher

The fact that people have unlimited wants means that, they always want more of at least one good. Because people’s wants are unlimited but resources are scarce, choices must be made. A resource is something that is used to produce goods and services. The expression there is no such thing as a free lunch means, that resources used up in producing the lunch are not available to satisfy other wants. Melissa is self-employed lawyer who choose a higher priced restaurant 2 miles from home, the higher

technology and more in the decade ahead. From Manager to Leader Conquer Information Overload Confessions of a Micromanager SEPTEMBER: LEADERSHIP An apt and engaging topic for the ILTA universe, as we’ve no shortage of great visionaries, leaders and mentors. Risky Business gaping holes lead to disaster Manage Lateral Hires 10 mar jun sep dec Leadership with courage, heart and brains Law2020 10 mar jun sep dec BC/DR Planning Do It Right! the future starts…

think about what is the reason for the growth of businesses? Why there is no single large company in each sector or why companies are not all the same size? These issues permeate the economic studies for a long time, the search for the logic of the behavior of firms, markets and relations between them. The theories of the firm have different approaches and comprise a large field of economics. Let's start with a brief passage through the issues of the theories of the firm that are…

BUSINESS STRATEGY Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2006, 2003, 2000, 1997, 1994 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited…