Mean-Variance Utility Functions and the Demand for Risky Assets: An Empirical Analysis Using Flexible Functional Forms

Article Abstract:

In a mean-variance portfolio framework, a model of financial asset demand is developed by household sector. Using the Box-Coy Utility Function, proof is derived that the best fit comes from the Leontief Function. Signs consistent with theory and intuition are derived. Bias may arise from the use of aggregate data.

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Benesh, G.A. A Reexamination of the Empirical Relationship between Investment and Financial Decisions

Article Abstract:

The interrelationship of financing and investment decisions is examined. Under perfect capital markets these decisions are independent. When market imperfections exist financial decisions impact on investment decisions leading to jointly determined decisions.

Decision-making, Decision making, Finance

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An Empirical Test of the Redistribution Effect in Pure Exchange Mergers

Article Abstract:

The effect of pure stock exchange mergers on the values of debt and equity is examined. Holders of risky debt show significant gains from such a merger. Positive synergy is achieved by the bidding firms who have publicly traded bonds.

Acquisitions and mergers, Valuation

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