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Managerial Stock Options and the Hedging Premium

Author

Listed:
  • Niclas Hagelin
  • Martin Holmén
  • John D. Knopf
  • Bengt Pramborg

Abstract

"Previous studies have found mixed evidence on whether hedging increases firm value. Some studies have shown that managerial incentives may influence firm hedging. In this paper we provide evidence that when hedging is based upon incentives from managers' options, firm value decreases." Copyright 2007 The Authors Journal compilation (c) 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Niclas Hagelin & Martin Holmén & John D. Knopf & Bengt Pramborg, 2007. "Managerial Stock Options and the Hedging Premium," European Financial Management, European Financial Management Association, vol. 13(4), pages 721-741.
  • Handle: RePEc:bla:eufman:v:13:y:2007:i:4:p:721-741
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-036X.2007.00380.x
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    Cited by:

    1. Maria João Jorge & Mário Gomes Augusto, 2011. "The Value Of Hedging Through Corporate Governance: A Literature Review And Directions For Future Research," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(2), pages 113-130.
    2. Kapitsinas, Spyridon, 2008. "The Impact of Derivatives Usage on Firm Value: Evidence from Greece," MPRA Paper 10947, University Library of Munich, Germany.
    3. Belghitar, Yacine & Clark, Ephraim & Mefteh, Salma, 2013. "Foreign currency derivative use and shareholder value," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 283-293.

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