Brian Betker and Thomas W. Doellman
The purpose of this paper is to describe the student investment management program at Saint Louis University.
Abstract
Purpose
The purpose of this paper is to describe the student investment management program at Saint Louis University.
Design/methodology/approach
It is a case study of the program’s structure and investment performance.
Findings
The authors present information on the program’s philosophy and course structure, investment performance and how the authors use LinkedIn to involve alumni in the program.
Originality/value
The authors find that using LinkedIn to maintain alumni connections to the program takes little effort on the part of the instructors but adds value for current students and program alumni alike.
Details
Keywords
Michael J. Alderson and Brian L. Betker
The purpose of this paper is to examine the impact of managerial risk exposure on capital structure selection (net debt, or debt minus cash) as well as return on assets, capital…
Abstract
Purpose
The purpose of this paper is to examine the impact of managerial risk exposure on capital structure selection (net debt, or debt minus cash) as well as return on assets, capital expenditures, research and development expenditures and stock price performance.
Design/methodology/approach
The paper compares a sample of 123 all‐equity firms to a set of matching levered firms selected on the basis of industry, market cap and market‐to‐book assets. Managerial incentives are measured using the delta and vega of the manager's stock and option holdings.
Findings
Net debt levels decline as CEO wealth sensitivity to stock price changes (delta) increases. However, the paper finds no differences between the all‐equity firms and their levered matching firms in terms of return on assets, capital expenditures, R&D expense, or long run stock price performance.
Research limitations/implications
Findings are consistent with the idea that managerial incentives drive net debt decisions even among all‐equity firms. However, given that there are no differences between the sample firms and their matched firms in terms of investment or stock price performance, the effect of managerial risk aversion appears to be confined to financial policy.
Originality/value
The paper uses modern methods for measuring managerial risk exposure to revisit the literature on all‐equity firms, and show that managerial risk exposure affects the net debt decision in these firms.