Rebello, Michael J.

Permanent URI for this collectionhttps://hdl.handle.net/10735.1/3188

Michael Rebello is an Ashbel Smith Professor of Finance and Managerial Economics. His research interests include:

  • Corporate governance
  • Corporate capital structure
  • Corporate restructuring
  • Security analysts
  • Venture capital financing
  • Mutual funds
  • Experimental economics
  • Genetic algorithms
  • Learning models.

Find more information about Dr. Rebello on his Faculty, Endowed Professorships and Chairs, Curriculum Vitae, and Research Explorer pages.

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Recent Submissions

Now showing 1 - 2 of 2
  • Item
    Spillovers from Good-News and Other Bankruptcies: Real Effects and Price Responses
    (Elsevier B.V.) Baranchuk, Nina; Rebello, Michael J.; 0000-0002-5994-2436 (Baranchuk, N); 1230396 (Baranchuk, N); Baranchuk, Nina; Rebello, Michael J.
    We model debt restructurings that could endogenously end in bankruptcy, and study spillovers to competitors’ operating decisions, profits, restructuring outcomes and security prices. We show that while bankruptcy could cause the firm's share price to drop, bankruptcy always signals good news about the firm. We identify the conditions under which a bankruptcy also signals good news about competitors. We demonstrate that when a firm's bankruptcy costs are relatively small, bankruptcy raises its share price while lowering the prices of competitors’ shares and debt as well as boosting the probability that they will enter bankruptcy. When there is little information asymmetry about the firm's prospects, or the information asymmetry is about industry prospects, bankruptcy raises competitors’ share and debt prices and lowers their probability of bankruptcy. ©2018 Elsevier B.V. All rights reserved.
  • Item
    Product Market Efficiency: The Bright Side of Myopic, Uninformed, and Passive External Finance
    Noe, Thomas H.; Rebello, Michael J.; Rietz, Thomas A.; 0000 0000 4963 3598 (Rebello, MJ); 2001013389 (Rebello, MJ)
    We model the effect of external financing on a firm's ability to maintain a reputation for high-quality production. Producing high quality is first best. Defecting to low quality is tempting because it lowers current costs while revenue remains unchanged because consumers and outside investors cannot immediately observe the defection. However, defection to low quality impairs the firm's reputation, which lowers cash flows and inhibits production over the long term. Financing via short-term claims discourages defection to low quality because the gains from defection are mostly captured by outside investors through an increase in the value of their claims. Therefore, if the firm relies on short-term external financing, it is more likely to produce over the long run, produce high-quality goods, and enjoy high profitability. The aggregate results from a laboratory experiment generally accord with these predictions.

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