IT has frequently been hypothesized that the separation of corporate owner- ship from control could have an important influence on both profits and risk, ever since the phenomenon was first documented by Berle and Means [2]. Following mostly from the work of Baumol [i], Williamson [27], and Monsen and Downs [I7], two primary hypotheses have developed in the literature. Briefly, the first managerial hypothesis states that executives of manager-controlled firms are less likely to engage in strictly profit-maximiz- ing behavior than are executives of owner-controlled firms. The second states that executives of manager-controlled firms are also likely to exhibit more risk-averse behavior due to asymmetries in managerial reward structures, with the implication that such firms will consequently be less risky invest- ments for equity holders