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Browsing Department of Finance by Author "Mahmudi, Hamed"
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Item Director networks and firm value(Journal of Corporate Finance, 2024-02-13) Bakke, Tor-Erik; Black, Jeffrey R.; Mahmudi, Hamed; Linn, Scott C.Are the professional networks of directors valuable? To separate the effect of director networks on firm value from the effect of other value-relevant director attributes, we use the unexpected deaths of directors as a shock to the director networks of interlocked directors. By studying the announcement returns and using a difference-in-differences methodology, we find the negative shock to director networks reduces the value of interlocked firms – a result that is stronger for firms that are more likely to benefit from access to information from board connections. This evidence is consistent with director networks being valuable and improving access to information.Item Why Are Bidder Termination Provisions Included in Takeovers?(Journal of Financial and Quantitative Analysis, 2021-08-10) Chen, Zhiyao; Mahmudi, Hamed; Virani, Aazam; Zhao, XiaofeiWe present a rationale for bidder termination provisions that considers their effect on bidders’ and targets’ joint takeover gains. The provision’s inclusion can create value by enabling termination when the target becomes less valuable to the bidder than on its own, but creates a trade-off because termination may also occur when the target is more valuable to the bidder than on its own. This trade-off explains why the provision is included in only some deals, and explains variation in termination fees. Inclusion of the provision is associated with larger combined announcement returns, provided that the termination fee is priced appropriately.