The notion of empty voting, or borrowing shares of stock to vote without an equivalent economic interest, has captured the attention of both the financial press and financial researchers. We investigate the securities lending market around proxy record dates for evidence of proxy abuse. We verify a weak statistical effect for share capture at the proxy. However, after controlling for dividend record dates (when more stock lending activity occurs), incremental equity lending activity at the proxy is indistinguishable from zero.

A large negative stock price reaction to a restatement announcement could imply a significant accounting error, or one made by a firm with a high probability of being sued. We investigate the extent to which market reactions to restatement announcements are explained by litigation risk. We model the simultaneous relation between restatement announcement abnormal returns and litigation risk and find that about half of the −9.2% average restatement announcement effect is due to expected litigation costs. We also find that the significance of the accounting error only affects abnormal return indirectly because it increases the probability of being sued.

Dividend policies provide an opportune setting to examine how firms simultaneously manage the diverging interests of shareholders and creditors. Dividends ease shareholders' concerns about expropriation by insiders while exacerbating creditors' concerns about expropriation by shareholders. Firm insiders should set dividend policies to minimize the agency costs of equity and debt. Using a sample of 39 countries for 1991–2010, we find strong evidence that dividends are more positively sensitive to creditor (shareholder) rights when shareholders (creditors) are adequately protected. Our research emphasizes the importance of accounting for the interactions between both agency relationships when studying corporate policies.

In a three-way takeover, a firm bids for a bidder while the bidder's own acquisition deal is ongoing. The bid creates a three-party fight among the target, bidder, and bidder's bidder (b-bidder) which is unobservable in typical takeover contests. Examining a sample of three-way takeovers, we find that more than half of the deals are clustered in financial, utilities, and communication, where fierce competition for market power drives the three-way bids. Targets and bidders gain from the three-party bargaining at the expense of b-bidders who appear to be more concerned about winning the bids irrespective of the costs.

I investigate the impact on trading characteristics of firms announcing share repurchases using a relatively new buyback method—accelerated share repurchases (ASRs). I find that trading costs decrease and market quality improves following an ASR announcement. The improvement in liquidity is not accompanied by significant changes in information asymmetry or price volatility. Multivariate tests show that the change in volatility and the presence of price constraints in the ASR agreement are significant in explaining the changes in spreads, but the reasons given by firms for conducting the ASRs are not. Thus, in the case of ASRs, the announced involvement of an investment bank buying shares on behalf of the firm improves liquidity without significantly affecting the level of information asymmetry.

When utility is specified recursively as a function of both consumption and money, real money growth becomes a common factor in addition to the market excess return and consumption growth. The risk premium on the money factor is negative because money complements consumption and is positively related to the stochastic discount factor. Growth portfolios, short-term loser portfolios, and long-term winner portfolios tend to have higher loadings on the money factor and, thus, earn lower premiums on money.