William J. Bertin

The Impact of Product Warranties on the Capital Structure of Australian Firms

This paper examines the impact of Australian firms’ warranty policies on capital structure. The sample consists of 378 firms and 1727 firm-years for Australian public firms for the period 2006–2010. The results suggest that warranty policies impact on Australian firms’ capital structures. Firms offering product warranties to customers have less leverage than those firms that do not. Firms commit to honour warranty contracts, whether explicit or implicit, by selecting lower leverage levels.

The Intraday Price Behavior of Australian Exchange Traded Options and Warrants

This study focuses on the price discovery process in Australian option and warrant markets. Characterizing these two markets in terms of their cost structures and institutional features, we formally test competing price discovery hypotheses. The general findings indicate that the warrants market is the dominant market suggesting that their lower trading cost outweigh their less attractive institutional features. Additionally, we find that idiosyncratic differences among firms may result in a clientele effect thus providing justification for the coexistence of these seemingly redundant markets.