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Title:Two Essays in Corporate Finance and Investment
Author(s):Kim, Joonghyuk
Doctoral Committee Chair(s):Narasimhan Jegadeesh
Department / Program:Finance
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Economics, Finance
Abstract:The second essay, "Dual-class Stocks: Motivation and Effects on Firm Valuation, Corporate Governance, Capital Structure, and Payout Policy", addresses several issues in dual-class stocks: why and when firms create dual-class stocks, and how the creation of dual-class stocks affects shareholders' wealth, corporate governance, capital structure, and payout policy. The results suggest that managers adopt the dual-class equity structure to raise additional outside equity capital without losing their control of the firms, rather than an antitakover measure. Adopting dual-class structure has a negative effect on shareholders' wealth that is observable only over a long horizon of time after the change. Dual-class firms tend to have board of directors that provide less effective monitoring roles for outside shareholders even before the change. They tend to keep the composition after the dual-class creation. The results suggest that over a long horizon of time, dual-class firms tend to use equity more than debt for their external capital source. No significant difference in dividend payout policy between dual-class firms and their industry and size matched firms is found.
Issue Date:2001
Description:125 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2001.
Other Identifier(s):(MiAaPQ)AAI3023093
Date Available in IDEALS:2015-09-28
Date Deposited:2001

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