Three Essays on Dual-Class Stock Structure

Dual-class stock structure is characterized by the separation of voting rights and cash flow rights. The departure from a common “one share-one vote” configuration creates ideal conditions for conflicts of interest and agency problems between controlling insiders (the holders of voting rights) and remaining shareholders. The owners of voting rights have the opportunity to extract private benefits and act in their personal interest; as a result, dual-class firms are often perceived to have low transparency and high information asymmetry. This dissertation investigates the quality of information and the information environment of firms with two classes of stock. The first essay examines the quality of information by studying accruals in dual-class firms in comparison to firms with only one class of stock. The results suggest that the quality of accruals is better in dual-class firms than in single-class firms. In addition, the difference in the quality of accruals between firms that abolish their dual-class share structure by unification and singe-class firms disappears in the post-unification period. The second essay investigates the earnings informativeness of dual-class firms by examining the explanatory power of earnings for returns. The results indicate that the earnings informativeness is lower for dual-class firms as compared to single-class firms. Earnings informativeness improves in firms that unify their shares. The third essay compares the level of information asymmetry between dual-class firms and single-class firms. It is documented that the information environment for dual-class firms is worse than for single-class firms. Also, the finding suggests that the difference in information environment between dual-class firms and single-class firms disappears after dual-class stock unification.

Price discovery in dual-class shares across multiple markets

We extend the standard price discovery analysis to estimate the information share of dual-class shares across domestic and foreign markets. By examining both common and preferred shares, we aim to extract information not only about the fundamental value of the rm, but also about the dual-class premium. In particular, our interest lies on the price discovery mechanism regulating the prices of common and preferred shares in the BM&FBovespa as well as the prices of their ADR counterparts in the NYSE and in the Arca platform. However, in the presence of contemporaneous correlation between the innovations, the standard information share measure depends heavily on the ordering we attribute to prices in the system. To remain agnostic about which are the leading share class and market, one could for instance compute some weighted average information share across all possible orderings. This is extremely inconvenient given that we are dealing with 2 share prices in Brazil, 4 share prices in the US, plus the exchange rate (and hence over 5,000 permutations!). We thus develop a novel methodology to carry out price discovery analyses that does not impose any ex-ante assumption about which share class or trading platform conveys more information about shocks in the fundamental price. As such, our procedure yields a single measure of information share, which is invariant to the ordering of the variables in the system. Simulations of a simple market microstructure model show that our information share estimator works pretty well in practice. We then employ transactions data to study price discovery in two dual-class Brazilian stocks and their ADRs. We uncover two interesting ndings. First, the foreign market is at least as informative as the home market. Second, shocks in the dual-class premium entail a permanent e ect in normal times, but transitory in periods of nancial distress. We argue that the latter is consistent with the expropriation of preferred shareholders as a class.

Impacto da emissão dual-class na estrutura de capital

A tese propõe que empresas que emitem apenas ações com direitos de voto utilizam mais capitais de terceiros do que empresas que emitem tanto ações votantes quanto não votantes. No desenvolvimento do trabalho, foi demonstrada a relevância de relacionar endividamento ao fato de uma empresa emitir ou não ações sem direito a voto, considerando as principais teorias de estrutura de capital e a realidade brasileira. Como os modelos teóricos que explicam o nível de endividamento das empresas ainda carecem de capacidade explicativa, a busca por novos determinantes está presente na literatura de estrutura de capital. A ocorrência da emissão de ações em classes diferenciadas (dual-class) como fator impactante no nível de endividamento foi analisada sob três prismas: de mercado, dos setores e das empresas que unificaram suas ações. Pelas três investigações ficou evidenciada a perspectiva de que o endividamento seja menor nos casos de emissão de ações preferenciais, considerando o ambiente de negociação e regulamentação do Brasil. A aceitação da tese tem reflexos teóricos na identificação de um fator que deve ser levado em consideração nos modelos de estrutura de capital, bem como suscita a importância de gestores, investidores e credores reconhecerem que o fato de uma empresa ser dual-class impacta não apenas na sua estrutura de controle, mas principalmente em sua estrutura de capital. Entre as considerações da aceitação da tese, estaria o reconhecimento de que empresas que ingressam no Novo Mercado na prática estão, no longo prazo, trocando o uso de ações preferenciais como forma de financiamento pela emissão de dívida.

Three essays on dual-class stock structure

Dual-class stock structure is characterized by the separation of voting rights and cash flow rights. The departure from a common "one share-one vote" configuration creates ideal conditions for conflicts of interest and agency problems between controlling insiders (the holders of voting rights) and remaining shareholders. The owners of voting rights have the opportunity to extract private benefits and act in their personal interest; as a result, dual-class firms are often perceived to have low transparency and high information asymmetry. This dissertation investigates the quality of information and the information environment of firms with two classes of stock. The first essay examines the quality of information by studying accruals in dual-class firms in comparison to firms with only one class of stock. The results suggest that the quality of accruals is better in dual-class firms than in single-class firms. In addition, the difference in the quality of accruals between firms that abolish their dual-class share structure by unification and singe-class firms disappears in the post-unification period. The second essay investigates the earnings informativeness of dual-class firms by examining the explanatory power of earnings for returns. The results indicate that the earnings informativeness is lower for dual-class firms as compared to single-class firms. Earnings informativeness improves in firms that unify their shares. The third essay compares the level of information asymmetry between dual-class firms and single-class firms. It is documented that the information environment for dual-class firms is worse than for single-class firms. Also, the finding suggests that the difference in information environment between dual-class firms and single-class firms disappears after dual-class stock unification.

Separation of Control and Cash-Flow Rights of State Owned Listed Enterprises: Channels of Expropriation after the Discriminated Share Reform in China

Literature on agency problems arising between controlling and minority owners claim that separation of cash flow and control rights allows controllers to expropriate listed firms, and further that separation emerges when dual class shares or pyramiding corporate structures exist. Dual class share and pyramiding coexisted in listed companies of China until discriminated share reform was implemented in 2005. This paper presents a model of controller to expropriate behavior as well as empirical tests of expropriation via particular accounting items and pyramiding generated expropriation. Results show that expropriation is apparent for state controlled listed companies. While reforms have weakened the power to expropriate, separation remains and still generates expropriation. Size of expropriation is estimated to be 7 to 8 per cent of total asset at mean. If the "one share, one vote" principle were to be realized, asset inflation could be reduced by 13 percent.

A Grammar of Tajio. A Language Spoken in Central Sulawesi

This work is a description of Tajio, a Western Malayo-Polynesian language spoken in Central Sulawesi, Indonesia. It covers the essential aspects of Tajio grammar without being exhaustive. Tajio has a medium sized phoneme inventory consisting of twenty consonants and five vowels. The language does not have lexical (word) stress; rather, it has a phrasal accent. This phrasal accent regularly occurs on the penultimate syllable of an intonational phrase, rendering this syllable auditorily prominent through a pitch rise. Possible syllable structures in Tajio are (C)V(C). CVN structures are allowed as closed syllables, but CVN syllables in word-medial position are not frequent. As in other languages in the area, the only sequence of consonants allowed in native Tajio words are sequences of nasals followed by a homorganic obstruent. The homorganic nasal-obstruent sequences found in Tajio can occur word-initially and word-medially but never in word-final position. As in many Austronesian languages, word class classification in Tajio is not straightforward. The classification of words in Tajio must be carried out on two levels: the morphosyntactic level and the lexical level. The open word classes in Tajio consist of nouns and verbs. Verbs are further divided into intransitive verbs (dynamic intransitive verbs and statives) and dynamic transitive verbs. Based on their morphological potential, lexical roots in Tajio fall into three classes: single-class roots, dual-class roots and multi-class roots. There are two basic transitive constructions in Tajio: Actor Voice and Undergoer Voice, where the actor or undergoer argument respectively serves as subjects. It shares many characteristics with symmetrical voice languages, yet it is not fully symmetric, as arguments in AV and UV are not equally marked. Neither subjects nor objects are marked in AV constructions. In UV constructions, however, subjects are unmarked while objects are marked either by prefixation or clitization. Evidence from relativization, control and raising constructions supports the analysis that AV and UV are in fact transitive, with subject arguments and object arguments behaving alike in both voices. Only the subject can be relativized, controlled, raised or function as the implicit subject of subjectless adverbial clauses. In contrast, the objects of AV and UV constructions do not exhibit these features. Tajio is a predominantly head-marking language with basic A-V-O constituent order. V and O form a constituent, and the subject can either precede or follow this complex. Thus, basic word order is S-V-O or V-O-S. Subject, as well as non-subject arguments, may be omitted when contextually specified. Verbs are marked for voice and mood, the latter of which is is obligatory. The two values distinguished are realis and non-realis. Depending on the type of predicate involved in clause formation, three clause types can be distinguished: verbal clauses, existential clauses and non-verbal clauses. Tajio has a small number of multi-verbal structures that appear to qualify as serial verb constructions. SVCs in Tajio always include a motion verb or a directional.

Design strategies for dual-band class-e power amplifier using composite right/left-handed transmission lines

In this article we propose a technique for dual-band Class-E power amplifier design using composite right/left-handed transmission lines, CRLH TLs. Design equations are presented and design procedures are elaborated. Because of the nonlinear phase dispersion characteristic of CRLH TLs, the single previous attempt at applying this method to dual bond Class-E amplifier design was not sufficient to simultaneously satisfy, the minimum requirement of Class-E impedances at both the fundamental and the second harmonic frequencies. This article rectifies this situation. A design example illustrating the synthesis procedure for a 0.5W-5V dual band Class-E amplifier circuit simultaneously operated at 900 MHz and 2.4 GHz is given and compared with ADS simulation.

Class of self-dual models in three dimensions

In the present paper we introduce a hierarchical class of self-dual models in three dimensions, inspired in the original self-dual theory of Towsend-Pilch-Nieuwenhuizen. The basic strategy is to explore the powerful property of the duality transformations in order to generate a new field. The generalized propagator can be written in terms of the primitive one (first order), and also the respective order and disorder correlation functions. Some conclusions about the charge screening and magnetic flux were established. ©1999 The American Physical Society.

Dual HLA class I and class II restricted recognition of alloreactive T lymphocytes mediated by a single T cell receptor complex

The alloreactive human T cell clone MBM15 was found to exhibit dual specificity recognizing both an antigen in the context of the HLA class I A2 molecule and an antigen in the context of the HLA class II DR1. We demonstrated that the dual reactivity that was mediated via a single clonal T cell population depended on specific peptide binding. For complete recognition of the HLA-A2-restricted specificity the interaction of CD8 with HLA class I is essential. Interestingly, interaction of the CD8 molecule with HLA class I contributed to the HLA-DR1-restricted specificity. T cell clone MBM15 expressed two in-frame T cell receptor (TCR) Vα transcripts (Vα1 and Vα2) and one TCR Vβ transcript (Vβ13). To elucidate whether two TCR complexes were responsible for the dual recognition or one complex, cytotoxic T cells were transduced with retroviral vectors encoding the different TCR chains. Only T cells transduced with the TCR Vα1Vβ13 combination specifically recognized both the HLA-A2+ and HLA-DR1+ target cells, whereas the Vα2Vβ13 combination did not result in a TCR on the cell surface. Thus a single TCRαβ complex can have dual specificity, recognizing both a peptide in the context of HLA class I as well as a peptide in the context of HLA class II. Transactivation of T cells by an unrelated antigen in the context of HLA class II may evoke an HLA class I-specific T cell response. We propose that this finding may have major implications for immunotherapeutic interventions and insight into the development of autoimmune diseases.

The benefit of modeling jumps in realized volatility for risk prediction : evidence from Chinese mainland stocks

Recent literature has focused on realized volatility models to predict financial risk. This paper studies the benefit of explicitly modeling jumps in this class of models for value at risk (VaR) prediction. Several popular realized volatility models are compared in terms of their VaR forecasting performances through a Monte Carlo study and an analysis based on empirical data of eight Chinese stocks. The results suggest that careful modeling of jumps in realized volatility models can largely improve VaR prediction, especially for emerging markets where jumps play a stronger role than those in developed markets.

Modeling and control of a CLC resonant dual active bridge

This paper proposes a linear large signal state-space model for a phase controlled CLC (Capacitor Inductor Capacitor) Resonant Dual Active Bridge (RDAB). The proposed model is useful for fast simulation and for the estimation of state variables under large signal variation. The model is also useful for control design because the slow changing dynamics of the dq variables are relatively easy to control. Simulation results of the proposed model are presented and compared to the simulated circuit model to demonstrate the proposed model's accuracy. This proposed model was used for the design of a Proportional-Integral (PI) controller and it has been implemented in the circuit simulation to show the proposed models usefulness in control design.

Targeting drug-resistant prostate cancer with dual PI3K/mTOR inhibition

The phosphatidylinositol-3-kinase (PI3K)/Akt/mTOR pathway is one of the most frequently activated signaling pathways in prostate cancer cells, and loss of the tumor suppressor PTEN and amplification of PIK3CA are the two most commonly detected mechanisms for the activation of these pathways. Aberrant activation of PI3K/Akt/mTOR has been implicated not only in the survival and metastasis of prostate cancer cells but also in the development of drug resistance. As such, selective inactivation of this pathway may provide opportunities to attack prostate cancer from all fronts. However, while preclinical studies examining specific inhibitors of PI3K or mTOR have yielded promising results, the evidence from clinical trials is less convincing. Emerging evidence from the analyses of some solid tumors suggests that a class of dual PI3K/mTOR inhibitors, which bind to and inactivate both PI3K and mTOR, may achieve better anti-cancer outcomes. In this review, we will summarize the mechanisms of action of these inhibitors, their effectiveness when used alone or in combination with other chemotherapeutic compounds, and their potential to serve as the next generation therapies for prostate cancer patients, particularly those who are resistant to the frontline chemotherapeutic drugs.

A single network adaptive critic (SNAC) architecture for optimal control synthesis for a class of nonlinear systems

Even though dynamic programming offers an optimal control solution in a state feedback form, the method is overwhelmed by computational and storage requirements. Approximate dynamic programming implemented with an Adaptive Critic (AC) neural network structure has evolved as a powerful alternative technique that obviates the need for excessive computations and storage requirements in solving optimal control problems. In this paper, an improvement to the AC architecture, called the �Single Network Adaptive Critic (SNAC)� is presented. This approach is applicable to a wide class of nonlinear systems where the optimal control (stationary) equation can be explicitly expressed in terms of the state and costate variables. The selection of this terminology is guided by the fact that it eliminates the use of one neural network (namely the action network) that is part of a typical dual network AC setup. As a consequence, the SNAC architecture offers three potential advantages: a simpler architecture, lesser computational load and elimination of the approximation error associated with the eliminated network. In order to demonstrate these benefits and the control synthesis technique using SNAC, two problems have been solved with the AC and SNAC approaches and their computational performances are compared. One of these problems is a real-life Micro-Electro-Mechanical-system (MEMS) problem, which demonstrates that the SNAC technique is applicable to complex engineering systems.

Fatigue crack-growth rate in ferrite martensite dual-phase steel

An empirical study is made on the fatigue crack growth rate in ferrite-martensite dual-phase (FMDP) steel. Particular attention is given to the effect of ferrite content in the range of 24.2% to 41.5% where good fatigue resistance was found at 33.8%. Variations in ferrite content did not affect the crack growth rate when plotted against the effective stress intensity factor range  which was assumed to follow a linear relation with the crack tip stress intensity factor range ΔK. A high  corresponds to uniformly distributed small size ferrite and martensite. No other appreciable correlation could be ralated to the microstructure morphology of the FMDP steel. The closure stress intensity factor , however, is affected by the ferrite content with  reaching a maximum value of 0.7. In general, crack growth followed the interphase between the martensite and ferrite.

Dividing the fatigue crack growth process into Stage I and II where the former would be highly sensitive to changes in ΔK and the latter would increase with ΔK depending on the  ratio. The same data when correlated with the strain energy density factor range ΔS showed negligible dependence on mean stress or R ratio for Stage I crack growth. A parameter α involving the ratio of ultimate stress to yield stress, percent reduction of area and R is introduced for Stage II crack growth so that the  data for different R would collapse onto a single curve with a narrow scatter band when plotted against αΔS.

Year class mortality, abundance and yield-per-recruit of yellowfin tuna in the eastern Pacific Ocean, 1954-1959

ENGLISH: One primary duty of the Inter-American Tropical Tuna Commission is to estimate the maximum sustainable catches of yellowfin tuna (Neothunnus macropterus) and skipjack (Katsuwonus pelamis), and to investigate and recommend proposals to maintain the stocks at levels which will permit these catches to be obtained. To do this, there is required some means of predicting yields relative to fishing intensity. . . The age composition of catch, and growth rate of yellowfin tuna for recent years have now been estimated (Hennemuth, 1961). In this paper, relative abundance at age of yellowfin tuna shall be estimated -and used, in turn, to estimate total mortality rate. Yield-per-recruit calculations, based on Beverton and Holt's (1957) simple equation, will be presented to compare present utilization with theoretical maxima under varying levels of fishing mortality and different ages at first capture. SPANISH: Uno de los principales deberes de la Comisión Interamericana del Atún Tropical es estimar las pescas máximas sostenibles de los atunes aleta amarilla (Neothunnus macropterus) y barrilete (Katsuwonus pelamis) , así como estudiar y recomendar proposiciones para mantener los stocks a niveles que permitan obtener estas pescas. Para lograr este propósito se requieren algunos medios que permitan predecir el rendimiento en relación con la intensidad de la pesca. . La composición de edades de la pesca y la tasa de crecimiento del atún aleta amarilla en años recientes han sido estimadas ahora (Hennemuth, 1961). En este trabajo, la abundancia relativa a una edad dada de esta especie será estimada y usada, a su vez, para estimar la tasa de mortalidad total. Los cálculos del rendimiento por recluta, basados en la ecuación simple de Beverton y Holt (1957), serán presentados para comparar la utilización actual con los máximos teóricos bajo valores variables de mortalidad por la pesca y a diferentes edades a la primera captura.