Harvard Corporate Governance

AUGUST 3, 2022

There are several reasons why corporations might prefer using share repurchases instead of or in addition to dividends, including (i) maintaining flexibility in determining the amount of cash returned to shareholders, (ii) an ability to award repurchased shares to employees as equity compensation, (iii) a modest tax advantage to shareholders (that (..)

Corporate Finance

Musings on Markets

AUGUST 19, 2024

In fact, the business life cycle has become an integral part of the corporate finance, valuation and investing classes that I teach, and in many of the posts that I have written on this blog. In 2022, I decided that I had hit critical mass, in terms of corporate life cycle content, and that the material could be organized as a book.

Corporate Finance

Musings on Markets

JANUARY 11, 2024

The six classes that I prepped for in those two years ranged from banking to investments to corporate finance, and while I have never worked harder, much of what I teach today came out of those classes. In 1984, I moved on to the University of California at Berkeley, as a visiting lecturer, teaching anything that needed to be taught.

Corporate Finance

Musings on Markets

DECEMBER 21, 2022

Starting in late January 2023, I will be back in the classroom, teaching valuation and corporate finance to the MBAs and valuation to the undergraduates, and these classes will continue through May 2023. The class starts with a question of what the end game should be for a business (profitability, value, social good?)

Corporate Finance

Musings on Markets

JANUARY 5, 2024

I have also developed a practice in the last decade of spending much of January exploring what the data tells us, and does not tell us, about the investing, financing and dividend choices that companies made during the most recent year.

Dividends

Musings on Markets

AUGUST 5, 2023

If you have been reading my posts, you know that I have an obsession with equity risk premiums, which I believe lie at the center of almost every substantive debate in markets and investing. The risk premium that you demand has different names in different markets.

Risk Premium

Musings on Markets

DECEMBER 15, 2021

During my teaching lifetime, I have taught a wide swath of classes, ranging from banking to equity instruments, but in the last twenty years, my focus has been on three classes, c orporate finance, valuation and investment philosophies , with the last one taught only online. The place to start is with accounting. am - 11.50

Corporate Finance

Reynolds Holding

DECEMBER 10, 2023

As a capital allocation decision, share buybacks intersect all three of the main corporate finance activities of investing, financing, and dividends [1]. For many mid and large cap companies in the UK and EU, share buybacks are implemented using Open Market Repurchases (OMRs) [9].

Dividends

Musings on Markets

JANUARY 12, 2021

Corporate Finance : Corporate finance is the development of the first financial principles that govern how to run a business. It is that mission that makes corporate finance the ultimate big picture class, one that everyone (entrepreneurs, investors, analysts, business observers) should take.

Corporate Finance

Reynolds Holding

JUNE 16, 2024

equity market. Indeed, decisions made by investors, institutions, and the corporations that they invest in can accelerate the growth of certain institutions relative to others. Institutions may exhibit differential growth in ownership due to the difference in return on the assets under management relative to the market return.

Dividends

Global Finance

SEPTEMBER 9, 2024

Corporates are hoarding cash, and that has meant a return to dividends and distributions but also more conservative cash management. HSF partner Gabrielle Wong echoes Lang’s view on the need for greater collaboration, noting a growing willingness by treasurers to invest time and money to access the market.

Treasury

Musings on Markets

JANUARY 6, 2023

Counter made-up numbers : It remains true that people (analysts, market experts, politicians) often make assertions based upon either incomplete or flawed data, or no data at all. Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing.

Risk Premium

Musings on Markets

FEBRUARY 8, 2022

In the first few weeks of 2022, we have had repeated reminders from the market that risk never goes away for good, even in the most buoyant markets, and that when it returns, investors still seem to be surprised that it is there.

Risk Premium

Musings on Markets

NOVEMBER 4, 2022

Investors, used to a decade of better-than-expected earnings and rising stock prices at these companies, have been blindsided by unexpected bad news in earnings reports, and have knocked down the market capitalization of these companies by hundreds of billions of dollars in the last few weeks.

Start-ups

Musings on Markets

JANUARY 31, 2024

Your answer to that question will determine not just how you approach running the business, but also the details of how you pick investments, choose a financing mix and decide how much to return to shareholders, as dividend or buybacks.

Equity

Reynolds Holding

OCTOBER 10, 2022

trillion to buy back their shares, which is significantly more than these firms spent on dividend payments to their shareholders (Lazonick, Sakinç, and Hopkins, 2020). Bendig, Willmann, Strese, and Brettel (2018) show that stock repurchases are associated with cuts in marketing costs and more product recalls. REFERENCES. Willmann, D.,

Finance

Musings on Markets

FEBRUARY 27, 2022

That said, about 31% of the net profits of all publicly traded firms listed globally in 2021 were generated by financial service firms; that percent is lower in the US and higher in emerging markets. IFRS and GAAP now treat as leases as debt, but that is still not the case in many other markets that are not covered by either standard).

Start-ups

Brian DeChesare

AUGUST 31, 2022

Convertible Arbitrage Definition: Convertible arbitrage is a relative value strategy in which a hedge fund profits based on the pricing discrepancy between a company’s convertible bonds and its underlying stock; the fund exploits changes in volatility, credit quality, and interest rates to make money while minimizing overall market risk.

Banking

Reynolds Holding

NOVEMBER 30, 2023

On November 21, 2023, the staff of the Securities and Exchange Commission’s (SEC’s) Division of Corporation Finance issued eight new Compliance & Disclosure Interpretations (C&DIs), and revised two previously issued C&DIs, relating to the final pay-versus-performance (PVP) disclosure rules adopted last year. Answer: Yes.

Compliance

Brian DeChesare

JUNE 1, 2022

Traditionally, the sector was viewed as a defensive play for investors who wanted stable dividends and no drama. But over time, trends like market liberalization, deregulation, the shift to renewables, and the ESG religion “movement” have shaken up a sleepy sector. Is the Power & Utilities Investment Banking Group Right for You?

Banking

Valutico

APRIL 17, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. This model takes into account a variety of factors, such as risk-free rate, beta, and expected market returns. A beta of 1.0 A beta of 1.0

Weighted Average Cost of Capital

Valutico

APRIL 17, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. This model takes into account a variety of factors, such as risk-free rate, beta, and expected market returns. A beta of 1.0 A beta of 1.0

Weighted Average Cost of Capital

Valutico

APRIL 12, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. This model takes into account a variety of factors, such as risk-free rate, beta, and expected market returns. A beta of 1.0 A beta of 1.0

Weighted Average Cost of Capital

Musings on Markets

JANUARY 9, 2021

I spent the first week of 2021 in the same way that I have spent the first week of every year since 1995, collecting data on publicly traded companies and analyzing how they navigated the cross currents of the prior year, both in operating and market value terms.

Risk Premium

Brian DeChesare

SEPTEMBER 11, 2024

Finally, many renewable energy debt deals take place within Project Finance teams at banks – but Project Finance and corporate finance are very different ! Since equity deals are highly dependent on market conditions, deal flow tends to be much more uneven than in asset-level M&A.

Banking

Musings on Markets

MARCH 8, 2023

This is the last of my data update posts for 2023, and in this one, I will focus on dividends and buybacks, perhaps the most most misunderstood and misplayed element of corporate finance. Viewed in that context, dividends as just as integral to a business, as the investing and financing decisions.

Dividends

Brian DeChesare

APRIL 24, 2024

Energy Consulting to Asset Management: Consulting is closer to finance than engineering, but a pre-MBA internship would still be useful because AM firms recruit relatively few MBAs and normally want people with finance experience. below the normal “ middle-market private equity ” cut-off).

Start-ups

Reynolds Holding

MARCH 5, 2023

The staff of the Securities and Exchange Commission’s (SEC’s) Division of Corporate Finance recently issued guidance to address open questions related to the final pay-versus-performance (PVP) disclosure rules adopted in 2022. However, it is not clear whether or how this informal guidance from 2014 applies to the PVP rules.

Equity

Harvard Corporate Governance

AUGUST 5, 2022

Share Repurchases on Trial: Large-Sample Evidence on Market Outcomes, Executive Compensation, and Corporate Finances. Tags: Capital allocation , Dividends , Executive Compensation , Firm performance , Incentives , Repurchases , Shareholder value. Posted by Nicholas Guest (Cornell University), S.P.

Capital Structure

Musings on Markets

JANUARY 8, 2022

To start the year, I returned to a ritual that I have practiced for thirty years, and that is to take a look at not just market changes over the last year, but also to get measures of the financial standing and practices of companies around the world. Happy New Year, and I hope that 2022 brings you good tidings!

Risk Premium

Musings on Markets

JANUARY 28, 2024

In my last data updates for this year, I looked first at how equity markets rebounded in 2023 , driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound.

Risk Premium

Brian DeChesare

AUGUST 10, 2022

Oil & Gas Investment Banking Definition: In oil & gas investment banking, professionals advise companies that search for, produce, store, transport, refine, and market energy on raising debt and equity and completing mergers and acquisitions. Also, there are few “independent” Downstream companies in major markets like the U.S.,

Banking

Musings on Markets

MAY 11, 2021

The Taxation of Investment Income In much of the world, income from investments (interest, dividends) is treated differently than earned income (salary, wages), by the tax code, and the reasons for the divergence are both practical and political: 1.

Dividends

Global Finance

MARCH 7, 2025

The oil giant cut its dividend to balance shareholder payouts with rising capital investments amid lower crude prices and evolving market conditions. Saudi Arabian Oil, better known as Aramco, is recalibrating its dividend strategy as it navigates weaker oil prices and rising capital investment demands. billion from $121.3

Dividends

Reynolds Holding

APRIL 9, 2025

On April 4, 2025, the staff of the SECs Division of Corporation Finance (the Staff) issued a statement addressing the status of certain stablecoins under the U.S. Treasury bills, or registered money-market funds). It also enables arbitrage that keeps any market price fluctuations tightly anchored to $1. securities laws.

Banking

Reynolds Holding

JUNE 15, 2025

On May 29, 2025, the staff of the SEC’s Division of Corporation Finance (the “Staff”) issued a statement concluding that certain proof-of-stake blockchain “staking” activities do not involve the offer or sale of “securities” within the meaning of the Securities Act of 1933 or the Securities Exchange Act of 1934.

Compliance

Reynolds Holding

DECEMBER 22, 2024

Moreover, the success of the Google IPO in 2004 provided market validation for the entrepreneurs use of dual class common stock as a way of retaining control while retaining considerably less than 50 percent of the cash flow rights of the public company. The dividend payout did not maximize Sinvens value as a public company.

Dividends