BEGIN:VCALENDAR
VERSION:2.0
PRODID:-//Talks.cam//talks.cam.ac.uk//
X-WR-CALNAME:Talks.cam
BEGIN:VEVENT
SUMMARY:Corporate Governance and the CAPM: Some Theory and Evidence - Erns
 t-Ludwig von Thadden (University of Manheim)\, Professor of Economics and 
 Finance.
DTSTART:20190516T113000Z
DTEND:20190516T123000Z
UID:TALK109144@talks.cam.ac.uk
CONTACT:CERF/CF Admin
DESCRIPTION:The paper extends the classic risk-return tradeoff of the CAPM
  to a risk-effort tradeoff\, by assuming that managerial effort is necessa
 ry to generate cash flows. Corporate governance standards influence the ma
 nager's return to effort\, her exposure to corporate risk\, and the diluti
 on of shareholder value. In capital market equilibrium\, this tradeoff has
  implications for the firm's cash flows and stock returns\, and this in tu
 rn affects the endogenous choice of governance standards. Laxer governance
  standards decrease the stock's β\, and in equilibrium systematic and idi
 osyncratic stock return risk are both negatively correlated with governanc
 e laxity. Various empirical tests with U.S. data using the corporate gover
 nance index of Gompers\, Ishii\, and Metrick (2003) are consistent with ou
 r predictions.
LOCATION:North 10 (lower ground)\, Trumpington Street
END:VEVENT
END:VCALENDAR