We are delighted to announce that the winner of the 2011 Spängler IQAM Best Paper Prize is: “Operating Leverage” by Robert Novy-Marx, The two runners-up for the award are: “Inside Debt” by Alex Edmans and Qi Liu and “Fear of the Unknown: Familiarity and Economic Decisions” by Henry Cao, Bing Han, David Hirshleifer, and Harold Zhang, The awards were presented at the 2011 annual meeting of the European Finance Association in Stockholm on August 19. We are grateful to Spängler IQAM Invest for sponsoring this award.

We are delighted to announce that the winner of the 2010 Deutsche Bank Best Paper Award is: “Corporate Governance Externalities” by Viral Acharya and Paolo Volpin which appeared in issue 1 of Volume 14 and was voted by the editorial board as the best article published in the last four issues of the Review of Finance. The two runners-up for the award were: “Determinants of Sovereign Risk: Macroeconomic Fundamentals and the Pricing of Sovereign Debt” by Jens Hilscher and Yves Nosbusch and “The Limits of the Limits of Arbitrage” by Alon Brav, J.B. Heaton and Si Li The awards were presented at the 2010 annual meeting of the European Finance Association in Frankfurt on August 27th. We are grateful to the Deutsche Bank Foundation for sponsoring this award.

Winners of the Best Paper Competition in Corporate Governance Get access Review of Finance, Volume 13, Issue 4, October 2009, Page v, https://doi.org/10.1093/rof/rfp027 Published: 01 October 2009

We would like to inform all the readers and friends of the Review of Finance that there has been a change of guard among coeditors. Starting with this issue, Franklin Allen, Peter Bossaerts, Colin Mayer and Will Goetzmann are stepping down and are being replaced by Michael Brandt (Duke), Thierry Foucault (HEC Paris), Holger Mueller (NYU Stern) and Steven Ongena (Tilburg). We wish to express our gratitude to the departing coeditors for the splendid job that they have done for so many years: Franklin, Colin and Will since the start of the Review of Finance in 2004, and Peter since 2005. They have all played a crucial role in the journal's success with their hard work, good taste and ability to attract exciting and innovative papers. At the same time, we extend a very warm welcome to the new coeditors, who will contribute fresh energies as well as excellent competencies to the journal. We are also happy to inform you that Bernard Dumas will remain on board as coeditor, and that the departing coeditors have accepted to retain an active role in the journal: Franklin, Colin and Will as advisory editors, and Peter as associate editor.

Using merger announcements and applying methods from computational linguistics we find strong evidence that stock prices underreact to information in financial media. A one standard deviation increase in the media-implied probability of merger completion increases the subsequent 12-day return of a long-short merger strategy by 1.2 percentage points. Filtering out the 28% of announced deals with the lowest media-implied completion probability increases the annualized alpha from merger arbitrage by 9.3 percentage points. Our results are particularly pronounced when high-yield spreads are large and on days when only few merger deals are announced.

This paper analyzes the relationship between a firm's capital structure and its information acquisition prior to capital budgeting decisions. It is found that low-growth industries can sustain a large number of levered firms. In these industries, leverage is negatively related to a firm's incentive to acquire information during the capital budgeting process. In contrast, high-growth industries only sustain a small number of levered firms. In these industries, levered firms acquire more information than all-equity financed firms. The model yields empirical predictions regarding the effects of leverage on the expected amount and the volatility of corporate investment.While leverage does not affect firm value, highly levered firms generate a more volatile cash flow than firms with low debt levels.