No abstract

Finance theory indicates that hedging increases firm value by reducing expected taxes, expected costs of financial distress, or other agency costs. This paper provides evidence on these hypotheses using survey data on firm's use of forwards, futures, swaps, and options combined with COMPUTSTAT data on firm characteristics. Of 169 firms in the sample, 104 firms use hedging instruments in 1986. The data suggest that firms which hedge face more convex tax functions, have less coverage of fixed claims, are larger, have more growth options in their investment opportunity set, and employ fewer hedging substitutes.

This article presents a brief overview of the requirements of FAS 106 and a review of the problem areas addressed by the comment letters. It also examines the provisions for postretirement benefits as they relate to the financial characteristics of selected industries. Finally, areas of concern related to the final statement are explored.

T his paper discusses the issue of shareholder liabiHty for corporate obUgations in small business. Although the law allows individuals to incorporate their businesses to lim it liabilities, the courts have in many cases pierced the corporate veil and held shareholders liable for obligations of the corporation. T he doctrine of piercing the corporate veil rarely affects shareholders of publicly-traded firms. In most cases, this doctrine would only reach shareholders of small, closely held firms. W hile fraud or unjust intent provide reasons for the court to disregard corporate entity, oftentimes the honest but uninformed actions of shareholders are to blame. T o maintain lim ited liability, shareholders of small businesses must act in accordance with die corporate form of ownership in representing the firm, managing the firm's assets, and financing the firm.