G. Rodney Thompson

SEC Rule 415: The Ultimate Competitive Bid

Controversy surrounds the Securities and Exchange Commissions (SEC) Rule 415 that went into effect in March 1982 and remained an experiment until it was permanenty adopted for large firms in November 1983. Rule 415allows a company to register all the securities it plans to issue over the next two years and then to sell someor all of the securities whenever it chooses. This procedure is known as a shelf registration. The purposes of Rule 415 are to simplify the registration of new corporate securities and to allow more flexibility in the way issues are underwritten.

Risk premia and the pricing of primary issue bonds

Abstract Researchers investigating the impact of various economic or regulatory changes on debt securities have generally employed two types of bond pricing models: the absolute yield or the relative yield model. This paper explores the behavioral implications of these two models and provides a theoretical and empirical examination of the contrasting specifications. Evidence is presented that suggests the relative yield model to be the more appropriate specification.

Shelf Registration: Competition and Market Flexibility

SHELF registration of new securities, known as Rule 415, began as an experiment by the Securities and Exchange Commission (SEC) in March 1982 and was permanently adopted in November 1983.1 With this rule companies file a single registration statement for all the securities they plan to issue over the next two years and then sell some or all of the securities whenever they choose. Because the SEC traditionally has prohibited delayed offerings, this is a major change in policy. The reason for this prohibition is the SECs requirement that timely information be available in the offering prospectus. If there is a substantial delay between registration and the sale of the securities, the SEC believes the registration statement will become dated. Investors therefore would base their

Agency Costs and Alternative Call Provisions: An Empirical Investigation

a The question of the appropriate call protection for a bond issue has recently attracted substantial attention. This question centers on the choice between offering the investor protection against redemption for any reason and offering protection against refunding the issue with lower cost debt. This paper investigates the influence of this decision on the reoffering yields of primary issue corporate bonds. Several explanations have been offered for the firms decision to attach call protection to its bond issue. Much of the earlier work addresses interest rate

Ethics and the ivory tower : The case of academic departments of finance

This study reports the results from a survey of 1,000 finance faculty members within schools of business across the U.S. concerning their knowledge of ethical transgressions as well as their attitudes towards ethics training in the curriculum. Ethical breaches appear most frequently with the unauthorized duplication of licensed software and the misuse of university resources for private consulting activity. Yet knowledge of ethical misconduct is highly segmented, with significant differences in reporting frequency between groups based upon citizenship, academic rank and school size. Contrary to the implications of Hawley (1991), we find there is a widely held belief by finance educators that business ethics has a legitimate role in business curriculums and should be included in finance course work. Further, our respondents strongly reject the notions that ethical practices are inconsistent with the principle of shareholder wealth maximization or that finance is more susceptible to ethical transgressions than other functional areas of business. We conclude that finance faculty are able to serve as legitimate ethical mentors for students and by implication may positively influence future corporate ethical behavior.

Utilisation of Direct and Indirect Estimates of Real GDP Per Capita: Implications of the Errors in the Variables Model

Several professional journals have presented the results of a series of recent studies on the nature and form of the relationship between real income per capita (purchasing-power-parity adjusted) and nominal income (exchange-rate adjusted). This paper extends that analysis by applyi ng the errors-in-the-variables model, a technique that allows for estimation of the asymptotic parameter bias that exists when using either a mixed vector of direct and indirect real GDP estimates or a nominal income vector. Statistical concerns about the form of the equation used to generate indirect estimates are also presented. Copyright 1987 by Royal Economic Society.

Sectoral employment shares: A comparative systems context

Abstract This paper presents estimation results for a reduced-form equation that is formulated to explain variation in relative sectoral employment shares of agriculture, industry, and services between market and socialist countries. Covariance analysis is employed to test for parameter constancy between the types of economic systems and over time. The results indicate that while the same variables influence sectoral employment shares in both types of economic systems, the parameter coefficients of the reduced-form equations vary between market and socialist economies, and intertemporally. Additionally, estimates of the gaps between “normal” and actual shares are presented for socialist countries for all three sectors.