Type of Document	Dissertation
Author	Krieger, Kevin
Author's Email Address	kmk02m@fsu.edu
URN	etd-04162009-092049
Title	Essays in Corporate Finance
Degree	Doctor of Philosophy
Department	Finance, Department of
Advisory Committee	Advisor Name Title James Ang Committee Chair Bruce Haslem Committee Member Yingmei Cheng Committee Member Xufeng Niu Outside Committee Member
Keywords	Dividend Sources Executive Motivation
Date of Defense	2009-02-25
Availability	unrestricted
Abstract This dissertation examines two underdeveloped topics in the field of corporate finance. In the first chapter, I detail the impact of expectations on the performance of firms under the leadership of new CEOs. I seek to answer the heretofore untested question of whether greater pressure motivates new CEOs to succeed, encourages them to engage in manipulative behaviors, or both. I show that new CEOs with greater expectations are significantly more likely to report superior achievement. However, after possible manipulation is accounted for, this superiority is reduced to insignificant levels. I conclude that while a small motivational effect of expectations may exist, spurring some new CEOs to perform, the strongest impact of heightened expectations for new CEOs is an increased likelihood to artificially inflate performance measures for the sake of appearance. In the second chapter, I question whether the market’s response to the announcement of significantly increased dividends depends on the future free cash flows, realized by the firm, which may prove to be susceptible to agency costs. I consider the market’s reaction to the announcement of substantial dividend hikes and find this reaction is not tied to the future free cash flows of the firm; however, I also find that the reaction is strongly linked to the excess cash balance of the firm in the year of the dividend increase. I contend the market attempts to consider agency costs when evaluating new dividends, but in doing so it fails to look beyond the firm’s current cash situation.
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