Corporate failure, Reporting delays, Information dissemination, Annual reports

This paper demonstrates that warrant valuation and exercise strategy differ fundamentally from call option valuation. Simultaneous exercise of warrants is shown to be suboptimal and a monopolist owning all warrants can achieve a higher value. Unless warrants are perfectly divisible, no satisfactory equilibrium exists for the valuation and exercise of widely held warrants. The problems encountered appear to be quite general and stem from necessary assumptions about future corporate dividend policy and capital structure. Such assumptions are necessary for any model of corporate security valuation.

This paper partially fills a theoretical void by developing an integrated model of the various branches of the medical community. A consistent and general framework is adopted to analyze equilibrium within the market for medical services under a stylized form of socialized medicine, without invoking demand shifting. The optimization problem faced by each agent is specified and the equilibrium is defined. The effect of various parameter changes on the market for medical services is analyzed. The predictions are not contradicted by the stylized facts.

Accounting systems, Incomplete information, Accounting techniques

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