scholarly journals Shareholder Wealth Maximization Under Leveraged Buyouts

2011 ◽  
Vol 4 (2) ◽  
pp. 48
Author(s):  
William J. Bertin ◽  
Khalil M. Torabzadeh
Keyword(s):  
Shareholder Wealth ◽  
Leveraged Buyouts ◽  
Excess Returns ◽  
Leveraged Buyout ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization ◽  
The Impact

This paper examines the possible excess returns to stockholders arising from leveraged buyout transactions in an effort to determine whether or not such transactions are consistent with shareholder wealth maximization. In addition, the excess returns generated through leveraged buyouts are compared to those associated with typical, non-leveraged acquisitions. The implications of these comparisons are discussed with a special emphasis on the impact of leveraged buyouts upon investors wealth. The major finding of this study is that shareholder wealth is increased, but not necessarily maximized, under leveraged buyouts.

Sustainable Corporations in Non-Financial Sectors Through Optimal Design of Executive Pay

2013 ◽  
Vol 14 (7) ◽  
pp. 715-748
Author(s):  
David Hansen
Keyword(s):  
Limited Liability ◽  
Active Role ◽  
Shareholder Wealth ◽  
Incentive Pay ◽  
Executive Pay ◽  
Business Economics ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization ◽  
The Impact

It is commonplace in current legal scholarship that pay packages for executives that were not tied to the impact of these executives' policies on shareholder wealth maximization often caused harm to shareholder interests and their companies, especially in the long term. The no-pay-without-performance postulate is as old as the first global economic crisis of the 20thcentury – the deep depression. Since then, this postulate has been repeated and substantiated innumerous times by the majority of experts in corporate law and business economics, but without real success. There are, however, commentators who deny the existence of a link between skewed incentive pay, excessive risk-taking, and financial losses. They instead insist on the superiority of the traditional director-centric model of corporate governance, which would allegedly preserve the balance that has generally worked well between the limited role and limited liability of shareholders and the active role, fiduciary duties, and potential liability of managers, which allegedly renders additional executive pay regulation unnecessary.

scholarly journals Could the impaired intention of ethical investment be recovered?

2016 ◽  
Vol 22 (5) ◽  
pp. 736-750 ◽  
Author(s):  
Chiung-Yao Huang ◽  
Yu-Cheng Lin ◽  
Chiung-Hui Chen
Keyword(s):  
Negative Impact ◽  
Shareholder Wealth ◽  
Moral Intensity ◽  
Ethical Investment ◽  
Remedial Measures ◽  
British Petroleum ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization ◽  
Classical Economic ◽  
Ethical Investments

AbstractThe environmental pollution caused by Advanced Semiconductor Engineering in October 2013 in Taiwan highlighted the fact that foreign investors tend to support the classical economic ideas of arbitrage and shareholder wealth maximization, which is in conflict with the fact that institutional investors in the current global capital market lean towards the stakeholder theory in ethical investments. Will local investors’ decision-making also be influenced by differences in the perceived ethics of negative environmental corporate social responsibility (ECSR)? Compared to the remedial measures implemented by British Petroleum for the 2010 Deepwater Horizon oil spill, Advanced Semiconductor Engineering, another international corporation, decided to not respond to any news regarding the toxic wastewater incident. In contrast, Advanced Semiconductor Engineering only made clearer promises after extreme public pressure. This study investigated whether remedial measures for negative ECSR are an important factor influencing investors’ decisions. The purpose is to clarify the interactions among perceived moral intensity of negative ECSR, the implementation of remedial measures, and the intention of ethical investment. An experimental design was employed to test the hypotheses. The results indicated that perceived moral intensity has a significant negative impact on the intention of ethical investment. The implementation of remedial measures for negative ECSR affects investors’ intent to invest. Finally, positive ECSR remedial measures also serve as a key moderating variable in the relationship between perceived moral intensity and the intention of ethical investment. This study clarified whether the provision of remedial mechanisms can effectively recover or maintain investor investment intent when companies experience negative ECSR.

Beyond Shareholder Wealth Maximization

1974 ◽  
Vol 3 (4) ◽  
pp. 25 ◽  
Author(s):  
M. Chapman Findlay ◽  
G. A. Whitmore
Keyword(s):  
Shareholder Wealth ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization

Stakeholder Happiness Enhancement: A Neo-Utilitarian Objective for the Modern Corporation

2013 ◽  
Vol 23 (3) ◽  
pp. 349-379 ◽  
Author(s):  
Thomas M. Jones ◽  
Will Felps
Keyword(s):  
Social Welfare ◽  
Shareholder Wealth ◽  
Wealth Maximization ◽  
Stakeholder Interests ◽  
Modern Corporation ◽  
Corporate Objective ◽  
Sequential Logic ◽  
Shareholder Wealth Maximization ◽  
Specific Alternative ◽  
Refined Version

ABSTRACT:Employing utilitarian criteria, Jones and Felps, in “Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique” (Business Ethics Quarterly 23[2]: 207–38), examined the sequential logic leading from shareholder wealth maximization to maximal social welfare and uncovered several serious empirical and conceptual shortcomings. After rendering shareholder wealth maximization seriously compromised as an objective for corporate operations, they provided a set of criteria regarding what a replacement corporate objective would look like, but do not offer a specific alternative. In this article, we draw on neo-utilitarian thought to advance a refined version of normative stakeholder theory that we believe addresses a major remaining criticism of extant versions, their lack of specificity. More particularly, we provide a single-valued objective function for the corporation—stakeholder happiness enhancement—that would allow managers to make principled choices between/among policy options when stakeholder interests conflict.

scholarly journals An empirical investigation of the goals of listed firms on the Johannesburg Stock Exchange

1982 ◽  
Vol 13 (2) ◽  
pp. 76-88
Author(s):  
Johan K. Bosch ◽  
Alwyn P. Du Plessis
Keyword(s):  
Special Reference ◽  
Empirical Investigation ◽  
Stock Exchange ◽  
Shareholder Wealth ◽  
Relative Importance ◽  
Goal Structure ◽  
Wealth Maximization ◽  
Listed Firms ◽  
Johannesburg Stock Exchange ◽  
Shareholder Wealth Maximization

In economics and finance it is often assumed that firms merely seek the maximization of shareholder wealth. In order to test this hypothesis an empirical investigation on the goal structure of firms listed on the Johannesburg Stock Exchange was performed with special reference to the relative importance of the concept of shareholder wealth maximization and social responsibility of the firm.The responses indicated that the wealth maximization hypothesis tested in this survey appears to be applicable for the firms which participated, albeit not always in terms of all the possible parameters of the wealth maximization hypothesis.

Sign in / Sign up

Export Citation Format

Share Document