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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THE TWO FACES OF BOND REFUNDING: REPLY
Published: 03/01/1978 | DOI: 10.1111/j.1540-6261.1978.tb03415.x
James S. Ang
THE TWO FACES OF BOND REFUNDING
Published: 06/01/1975 | DOI: 10.1111/j.1540-6261.1975.tb01856.x
James S. Ang
Risk A version and Information Structure: An Experimental Study of Price Variability in the Securities Markets
Published: 07/01/1985 | DOI: 10.1111/j.1540-6261.1985.tb05008.x
JAMES S. ANG, THOMAS SCHWARZ
This study investigates the differences in the behaviors between the speculative investors and the conservative investors in two separate experimental markets. Although the market for speculators shows greater price volatility in both bid/ask spread within a trade as well as with intraperiod variances, it exhibits several desirable properties. Specifically, the price patterns tend to converge closer, and at a greater speed to either the prior information equilibrium price or the rational expectation equilibrium price. It also achieves better allocational efficiency. And, it is also less likely to be misled by potentially “false” price information.
The Leasing Puzzle
Published: 09/01/1984 | DOI: 10.1111/j.1540-6261.1984.tb03892.x
JAMES ANG, PAMELA P. PETERSON
Prevailing theories in finance and economics suggest that leases and debt are substitutes; an increase in one should led to a compensating decrease in the other. In particular, there are three views on the magnitude of the substitution coefficient. Standard finance theory treats cash flows from lease obligations as equivalent to debt cash flows, thus describing the tradeoff between debt and leases as one‐to‐one. Others are willing to use a tradeoff of leases for debt which is less than, but close to, one. The rationale for a dollar of leases using less of debt capacity than a dollar of debt obligation is based upon the differences in the terms and nature of lease and debt contracts. Finally, there are some who argue that since leased assets may be firm‐specific, the risk of moral hazard may be great, resulting in a tradeoff of greater than one‐to‐one; that is, a dollar of a lease obligation uses more of debt capacity than a dollar of a debt obligation.
Return, Risk, and Yield: Evidence from Ex Ante Data
Published: 06/01/1985 | DOI: 10.1111/j.1540-6261.1985.tb04971.x
JAMES S. ANG, DAVID R. PETERSON
The purpose of this study is to investigate the relationship between return and yield in the context of ex ante data from The Value Line Investment Survey and by examining the role of dividends as a proxy for risk. The use of ex ante data should substantially reduce the confounding of tax and information effects that has affected earlier studies. Heteroscedasticity is detected in the after‐tax CAPM and found to be negatively related to yield and positively related to beta. Maximum likelihood methods are used to correct for heteroscedasticity and generate efficient coefficient estimates. Using data for each of the years 1973 through 1983, there is an overall positive relationship between expected return and yield. However, coefficient estimates of yield are highly variable from year to year.
Marginal Tax Rates: Evidence from Nontaxable Corporate Bonds: A Note
Published: 03/01/1985 | DOI: 10.1111/j.1540-6261.1985.tb04953.x
JAMES ANG, DAVID PETERSON, PAMELA PETERSON
This study offers an alternative method of calculating marginal personal tax rates through the pairing of nontaxable (industrial development and pollution control) and taxable corporate bonds. This procedure is shown to produce matched bond pairs that are comparable. Two hundred pairs of bonds are examined from the second quarter of 1973 through the second quarter of 1983. Testing of the marginal tax rate relationships indicates that the marginal personal tax rate is less than the corporate statutory tax rate.
The Effect of Taxes on the Relative Valuation of Dividends and Capital Gains: Evidence from Dual‐Class British Investment Trusts
Published: 03/01/1991 | DOI: 10.1111/j.1540-6261.1991.tb03756.x
JAMES S. ANG, DAVID W. BLACKWELL, WILLIAM L. MEGGINSON
We provide evidence that taxes affect equity valuation by studying British investment trusts having otherwise identical classes of cash‐ and stock‐dividend‐paying shares outstanding. We study 1969–1982, a period in which there were two dramatic changes in tax policy. We find that stock‐dividend shares, which are convertible into cash‐dividend shares, sell at premiums when the tax system favors capital gains and at discounts when the tax advantage of capital gains is reduced. After the 1975 elimination of the tax advantage to stock‐dividend shares, we observe that investors convert virtually all stock‐dividend shares into cash‐dividend shares.
Agency Costs and Ownership Structure
Published: 03/31/2007 | DOI: 10.1111/0022-1082.00201
James S. Ang, Rebel A. Cole, James Wuh Lin
We provide measures of absolute and relative equity agency costs for corporations under different ownership and management structures. Our base case is Jensen and Meckling's (1976) zero agency‐cost firm, where the manager is the firm's sole shareholder. We utilize a sample of 1,708 small corporations from the FRB/NSSBF database and find that agency costs (i) are significantly higher when an outsider rather than an insider manages the firm; (ii) are inversely related to the manager's ownership share; (iii) increase with the number of nonmanager shareholders, and (iv) to a lesser extent, are lower with greater monitoring by banks.