The Journal of Finance publishes leading research across all the major fields of finance. It is one of the most widely cited journals in academic finance, and in all of economics. Each of the six issues per year reaches over 8,000 academics, finance professionals, libraries, and government and financial institutions around the world. The journal is the official publication of The American Finance Association, the premier academic organization devoted to the study and promotion of knowledge about financial economics.
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AN EVALUATION AND EMPIRICAL STUDY OF THE DISCLOSURE OF ACCOUNTING POLICIES IN PUBLISHED FINANCIAL STATEMENTS*
Published: 9/1975, Volume: 30, Issue: 4 | DOI: 10.1111/j.1540-6261.1975.tb01042.x | Cited by: 0
Kailas J. Rao
SELECTIVE CREDIT POLICY: IS IT JUSTIFIED AND CAN IT WORK?
Published: 5/1972, Volume: 27, Issue: 2 | DOI: 10.1111/j.1540-6261.1972.tb00974.x | Cited by: 1
D. C. Rao
SELECTIVE CREDIT CONTROLS AND THE REAL INVESTMENT MIX: A GENERAL EQUILIBRIUM APPROACH
Published: 12/1973, Volume: 28, Issue: 5 | DOI: 10.1111/j.1540-6261.1973.tb01444.x | Cited by: 6
D. C. Rao, Ira Kaminow
LEVERAGE AND THE COST OF CAPITAL IN A LESS DEVELOPED CAPITAL MARKET: COMMENT
Published: 6/1971, Volume: 26, Issue: 3 | DOI: 10.1111/j.1540-6261.1971.tb01731.x | Cited by: 6
Cherukuri U. Rao, Robert H. Litzenberger
Do Spin‐offs Expropriate Wealth from Bondholders?
Published: 9/11/2003, Volume: 58, Issue: 5 | DOI: 10.1111/1540-6261.00598 | Cited by: 139
William F. Maxwell, Ramesh P. Rao
AbstractA wealth transfer from bondholders to stockholders is one of several hypotheses used to explain stockholder gains on the announcement of a spin‐off. However, previous empirical research has not found systematic evidence supporting the wealth expropriation hypothesis. Using a larger sample with comprehensive bond data, we find evidence consistent with wealth expropriation. Bondholders, on average, suffer a significant negative abnormal return during the month of the spin‐off announcement. However, even accounting for the loss to the bondholders, the aggregate value of the publicly traded debt and equity increases on a spin‐off announcement, suggesting that the wealth expropriation hypothesis is not a complete explanation of the stockholder gains. In explaining the magnitude of the losses to bondholders, we find they are a function of the loss in collateral in the spun‐off subsidiary and the level of financial risk of the parent firm. Consistent with a loss to bondholders, firms are more likely to have their credit rating downgraded than upgraded after a spin‐off. Additionally, consistent with the wealth transfer hypothesis, losses to bondholders tend to be more severe, the larger the gains to shareholders.
REPLY
Published: 6/1971, Volume: 26, Issue: 3 | DOI: 10.1111/j.1540-6261.1971.tb01732.x | Cited by: 1
L. V. L. N. Sarma, K. S. Hanumanta Rao
The Resiliency of the High‐Yield Bond Market: The LTV Default
Published: 9/1989, Volume: 44, Issue: 4 | DOI: 10.1111/j.1540-6261.1989.tb02641.x | Cited by: 1
CHRISTOPHER K. MA, RAMESH P. RAO, RICHARD L. PETERSON
This paper investigates the resiliency of the new‐issue high‐yield bond market by examining the changes in implied default rates of such bonds before and after the largest high‐yield bond default, i.e., the LTV bankruptcy. Specifically, the paper compares implied default probabilities of high‐yield bonds during the post‐LTV period calculated from actual new‐issue yields with instrumental default probabilities calculated on the assumption that the default had not occurred. A comparison of these probabilities reveals that the market's perception of default on the high risk segment of the bond market increased significantly after the LTV bankruptcy. However, the effect was transitory, lasting only six months. Thus, the market was resilient to a major default.
LEVERAGE AND THE VALUE OF THE FIRM
Published: 9/1969, Volume: 24, Issue: 4 | DOI: 10.1111/j.1540-6261.1969.tb00391.x | Cited by: 13
L. V. L. N. Sarma, K. S. Hanumanta Rao
On Determination of Stochastic Dominance Optimal Sets
Published: 6/1985, Volume: 40, Issue: 2 | DOI: 10.1111/j.1540-6261.1985.tb04965.x | Cited by: 85
VIJAY S. BAWA, JAMES N. BODURTHA, M. R. RAO, HIRA L. SURI
Applying Fishburn's [4] conditions for convex stochastic dominance, exact linear programming algorithms are proposed and implemented for assigning discrete return distributions into the first‐ and second‐order stochastic dominance optimal sets. For third‐order stochastic dominance, a superconvex stochastic dominance approach is defined which allows classification of choice elements into superdominated, mixed, and superoptimal sets. For a choice set of 896 security returns treated previously in the literature, 454, 25, and 13 distributions are in the first‐, second‐, and third‐order convex stochastic dominance optimal sets, respectively. These optimal sets compare with admissible first‐, second‐, and third‐order stochastic dominance sets of 682, 35, and 19 distributions, respectively.The applicability of superconvex stochastic dominance for continuous distributions defined over a bounded interval is then shown. The difficulties in identifying the elements of the superdominated set for distributions defined over the entire real line are demonstrated in the determination of the dominated choices for a set of normally distributed mutual fund returns previously examined by Meyer [9]. Specifically, we find that the dominated set determined by Meyer is too large.