Business Commons^™

An Economic Impact Study Of The "Boom" Period Of Baseball Stadium Redevelopment, Emily Mcnab

CMC Senior Theses

The intention of this study is to analyze the economic impact of redeveloped Major League Baseball stadiums opened between 1991 and 2004. Using two empirical models, including an event study, this impact analysis captures the economic conditions of the cities during the opening year of the stadium, as well as the prior conditions leading up to the opening of the stadium, along with any lingering effects or gradual changes in conditions. The impact was measured in relation to the Metropolitan Statistical Areas corresponding to the 18 ballparks included, specifically looking at the impact on employment rates and per capita personal …

An Examination Of The Government Accounting Standards Board, Christopher D. Jones

CMC Senior Theses

This thesis examines the Government Accounting Standards Board by considering its history, current structure, and treatment of a current accounting standards debate. It then uses this examination to make recommendations as to reforms of the GASB and government accounting.

The Secondary Market For Gift Cards And The Role Of Corporate Bankruptcy Risk, Kaitlyn A. Desai

CMC Senior Theses

The website, Plastic Jungle, is taking advantage of the rapidly growing gift card phenomena by creating a secondary market that enables consumers to buy, sell, and exchange gift cards online at a discount. This paper examines the relationship between this secondary gift card market and the corporate bankruptcy risk of companies with gift cards listed on the market. When a company issues a gift card, the card is unsecured debt and the cardholder becomes an unsecured creditor to the company. This paper investigates whether the cardholder acts similarly to other unsecured creditors or as someone who is merely holding another …

How Users Actually Use Financial Statements: A New Tool For Research In Experimental Accounting, Kevin Burke

CMC Senior Theses

This thesis presents a new methodology based on directly measuring user behavior and making decisions based on experimental results. I have built and tested a tool which will enable researchers to use the methodology to determine whether particular financial statement presentations are more beneficial than others. The tool records user movement on a computer screen with mouse tracking, which allows researchers to track user behavior in greater detail than ever before. The methodology was tested on a subject pool of non-professional financial analysts and junior professionals, who were presented with a company’s financial data in the current GAAP and a …

Solar Development In The Mojave Desert, Joseph B. Swartley

CMC Senior Theses

For more than two centuries, humans have been spewing “greenhouse gases” into the atmosphere through the burning of fossil fuels, deforestation, and the development of land, causing the planet’s surface temperature to increase at an accelerated rate. Climate change is one of the most pressing issues that the world is facing today, and in order to combat the effects of climate change, it is necessary to adopt the use of more renewable technology, namely solar energy. The United States' best region for solar development is the Mojave Desert, and many large-scale projects are being built or proposed to be built …

The Value Of The Sovereign Credit Default Market: Domestic Stock Market Interaction And Contagion Effects During Credit Crisis, Alexander M. Reichert

CMC Senior Theses

Credit Default Swaps have become a large part of financial markets and recently the center of debate between academics and regulators alike. Transferring the techniques to measure information flow between the CDS market and stock markets presented by Acharya and Johnson (2007), this paper looks at the relationship between a countries sovereign CDS spread level and its predominate stock exchange. Under the back drop of the Greek Credit Crisis in Spring of 2010 I measure contagion effects in the Euro Zone comparing the level of Granger causality significance between the stock and CDS market. I find that the greatest information …

A Valuation Of U.S. Not-For-Profit Summer Camps With A Comparison Of Two Members Of The Association Of Hole In The Wall Camps, Kristine N. Staley

CMC Senior Theses

Despite their prevalence throughout the United States, summer camps are rarely considered as businesses or high-functioning not-for-profit entities. This paper explores the camping industry with a focus on not-for-profit camps. It adapts typical not-for-profit efficiency metrics to camps in order to demonstrate that powerful missions are not always enough to keep not-for-profits in operation. The paper examines two members of the Association of Hole in the Wall Camps which serve children with serious and life-threatening illnesses. Ultimately, this paper is a tool for donors to observe how organizational performance is a crucial factor when donating to organizations with similar mission.

The Relationship Between Competitive Balance And Revenue In America's Two Largest Sports Leagues, Matt D. Pautler

CMC Senior Theses

This paper looks at the impact that competitive balance has on team revenues. The hypothesis that this paper is operating under is that higher levels of competitive balance will lead to higher levels of revenue. Two different measures of competitive balance will be used and regressions will be run to investigate whether high levels of the competitive balance measure are associated with high levels of revenue. The results of the data indicated that over all three time horizons (ten year, five year, and two year), high levels of variability in playoff appearances were associated with high revenue for Major League …

Transfer Pricing: Current Problems And Solutions, Ronald Wu

CMC Senior Theses

The current problems and possible solutions surrounding United States transfer pricing regulations are discussed and studied. The schemes large multinational companies are implementing to legally evade taxes are uncovered as the financial effects to the United States Treasury and government are becoming material. The benefits for these schemes are financially advantageous for corporations as they are able to report larger profits and higher returns for investors. But this is being done at the expense of our government. Corporations are finding ways to escape the high U.S. corporate tax rate and lower their global tax liabilities by allocating income to lower …

Airline Bankruptcy: The Determining Factors Leading To An Airline's Decline, Jason Tolkin

CMC Senior Theses

The purpose of this study was to determine what the critical factors are to an airline’s financial turmoil, leading ultimately to a bankruptcy filing. Over the past decade, the airline industries’ performance has been dismal, leading to 20 bankruptcy filings. As competition increases, it is crucial for airlines to know which core business areas are essential to success. This paper identifies 8 specific industry metrics that are used to compare airlines, revealing where certain airlines falter and others shine. Some of these metrics are later applied to a case study examining Trans World Airlines (TWA) and American Airlines (AA), highlighting …

Electric Vehicles: Market Opportunities In China, Shanna Hoversten

CMC Senior Theses

Electric vehicles (EVs) offer an exciting opportunity in China both in terms of the potential to build a domestic manufacturing base and the potential to create a strong domestic market for the product. The Chinese nation stands to benefit from both supply-side and demand-side promotion due to the economic stimulus from EV manufacturing and export, the environmental benefits of reduced air pollution and reduced greenhouse gas emissions, and the energy security benefits of transitioning away from foreign oil dependence. The Chinese have several advantages when it comes to stimulating EV industry development and EV deployment, including: leadership in battery technology, …

The Underlying Factors Of Regional U.S. Hotel Market Resiliency Post 9/11, Beaumont L. Heidrich

CMC Senior Theses

I was interested in researching the underlying factors that drove resiliency in regional U.S. hotel markets. I did this by conducting an empirical analysis of twenty nine different markets post September 11 and investigating general, leisure and business variables. I concluded that leisure variables were the underlying drivers of resiliency in regional U.S. hotel markets.

I then conducted an event study to try to apply my findings to stock market prices of publicly traded hotel companies. Although it was a challenge to differentiate between companies that depended more on leisure versus business customers due to their asset diversification, I categorized …

The Effect Of Age Upon Ceo Compensation: A Cross-Industry Study, Anthony Bouvier

CMC Senior Theses

The compensation of CEO’s has been at the forefront of the public’s mind for the past few years. During the recession, one could not go a day without hearing about the atrocious salaries and bonuses that executives were being paid. Although it only recently became an explosive topic, academics have been researching all aspects of compensation for many years. One of the earliest looked at the idea of pay for performance (Jensen and Murphy 1990), and the field has taken off from there. Many studies have been done on the determinants of compensation, and I was interested in how age …

Corporate Sustainability And The Recession: Firms' Strategy Response In A Financial Crisis, Carolyn M. Campbell

CMC Senior Theses

As the modern world deals with an increasing number of environmental and social crises, corporate sustainability is becoming ever more imperative for business. There is broad agreement that profit maximization can no longer be the exclusive goal of a company, with firms working to align environmental, social, and financial performance. Companies have demonstrated a wide variety of experiences in regards to the financial crisis and its effects on corporate sustainability. While some firms experienced serious setbacks in achieving environmental and social goals others firms claimed to have been ramping up sustainability efforts during the recession. However, most firms report that …

Analysis Of Acquirer Stock Performance In Mergers And Acquisitions In Alberta's Oil And Gas Industry, Harrison A. Zivot

CMC Senior Theses

This paper develops a framework that analyzes how mergers and acquisitions in Alberta’s oil and gas industry affect stock prices. In this experiment, a multivariate regression is applied to several industry-specific variables to determine if they have impacts on the abnormal stock returns of acquirers. The results show that abnormal returns 5 days prior to the public announcement of the transaction are, in fact, driven by several industry-specific variables. However, the returns immediately after the M & A announcements are similar to previous research done in other industries. Acquirers’ gains 2 days after the announcement are essentially unaffected by the …

Diversification Premium On Indian Adrs During The Financial Crisis, Rajat Gupta

CMC Senior Theses

Non-arbitrage asset pricing has been an avenue of unending interest to financial academics and practitioners alike. With increased capital outflow being permitted by developing economies, investors now have easy access to securities issued by foreign firms. The issue investigated in this research is concerned with the persistent presence of arbitrage opportunities between depository receipts and domestic stocks of Indian firms during the recent financial crisis. Instead of being priced in parity with one another during the crisis, ADRs of Indian firms were overpriced by as much as 70% for months on end. This thesis investigates the reasons giving rise to …

The Role Of Fair Value Accounting In Bank Failures: 2001-2010, Jacob Edward Eugene Spring

CMC Senior Theses

Over the Past two and a half years banks have failed at the fastest pace since the Great Depression. These rapidly mounting bank failures have rekindled a debate surrounding the use of fair value accounting, with many arguing that fair value has exacerbated the severity of the recent financial crisis through asset devaluation and the forced sale of assets in an effort to meet capital requirements. This paper seeks to test if an entity’s exposure to fair value which includes assets available-for-sale, trading assets, and loans held-for-sale as a percent of total assets increases the probability of bank failure through …

Private Equity Transaction Bankruptcy Risk Prediction, Lewis A. Corson

CMC Senior Theses

This study utilizes a sample of private equity backed acquisitions to test whether certain factors, evaluated and quantified on the date of transaction completion, serve as indicators of future transaction bankruptcy. The results of this paper suggest that the effective federal funds rate is significantly and positively correlated with the bankruptcy of private equity backed transactions. Other measured factors specific to the private equity sponsor, the target firm in the acquisition and the characteristics of the transaction are found to be insignificant. Analysis on the influence of these factors is performed using two types of binary-response models, which predict the …

Factors Affecting The Forecasting Ability Of Implied Correlation In Currency Options, Justin S. Eskind

CMC Senior Theses

Little research has been done into implied correlations, and the small literature grows even smaller when referring to currency options. The existing literature has established that implied correlation is a good if not the best forecaster of future realized correlation, and that this ability to forecast is not necessarily universal. This paper will establish that the forecasting ability of implied correlations in currency options varies across currency pairs, thus proving that not all implied correlations are created equal. Using two different proxies for the quality of the forecaster, the paper attempts to explain which characteristics of an option on a …

Conflict Of Interest?: Executive-Auditor Relationship And The Likelihood Of A Sec-Prompted Restatement, Henry Lyford

CMC Senior Theses

This study examines the relationship between executives and their independent auditor to see if there is a conflict of interest in their interaction. This study was motivated by the meltdowns, partially caused by fraudulent accounting, of many public companies in the late 1990s and early 2000s and the consequent passage of the Sarbanes-Oxley Act. This study examines the variables of audit fees, fees for other services, and auditor tenure to see if they are connected with the occurrence of an SEC-prompted restatement. The results show no significant correlation between amount of fees and the likelihood of an SEC-prompted restatement but …

Forecasting The Inland Empire's Economic Recovery, Jesse C. Franklin

CMC Senior Theses

The Inland Empire -Riverside and San Bernardino Counties - was one of the hardest hit areas in all of the United States during the Great Recession. Home prices have declined over 50%, significantly more than the 25% decline in the surrounding Los Angeles County, and housing starts have declined to over 90% from 2005. The Inland Empire has one of the highest unemployment rates in the US at 14.8%. This paper attempts to forecast the recovery for the Inland Empire. Employing univariate forecasts along with VAR(12) forecasts, focusing on housing starts and unemployment rates as the underlying variables, we find …

Saving America's Automobile Industry: The Bailouts Of 1979 And 2009, An Overview Of The Economic Conditions, Factors For Failure, Government Interventions And Public Reactions, Taylor A. Wall

CMC Senior Theses

This paper will discuss the bankruptcies experienced by U.S. automakers in both 1979 and 2009. The main factors which led the automakers into financial ruin was the uncontrolled power of labor unions, the severe financial impact of oil embargos, the aggressive imposition of federal regulations and the increasing dominance of Japanese imports. After discussing these important factors, the paper will describe the specifics of Chrysler’s bailout experience in 1979 with the positive public acceptance of the government loans, largely due to the character of Lee Iacocca. After delving into Chrysler, this paper will explain the specifics of the government’s bailout …

Spain And The 2004 Expansion Of The European Union: A Case Of Fdi Diversion?, Christopher M. Preston

CMC Senior Theses

With the expansion of the European Union there have been concerns over increasing competition for FDI attraction between member states. This study will examine to what extent, if to any extent at all, the admission of the Central and Eastern countries to the EU has raised completion for FDI in Spain. Spain and the CEECs will be compared in terms of advantages in FDI attraction. Ultimately, evidence and analysis will suggest that given current trend, there is no serious threat to diverting foreign assets from Spain to the CEECs.

Collegematchers, Inc: Business Plan & Market Overview, Daniel Black

CMC Senior Theses

This thesis details the business plan of CollegeMatchers, Inc, including a market overview. CollegeMatchers is a quick, easy, and free on-campus marketplace, that strives to create self sustaining communities on campuses everywhere.

The Impact Of Ceo Compensation On Firm Performance In The Oil Industry, Christophe M. Bindert

CMC Senior Theses

Critics often cite poor executive compensation schemes as one of the leading causes of the recent credit crisis. This paper investigates whether compensation structures at the end of the 2006 fiscal year created incentives for Chief Executive Officers (CEOs) in the oil industry to take on excessive risk, which subsequently may have lead to weaker firm performance during the crisis. I find no evidence to support the argument that higher pay sensitivity through option and other incentive awards lead to worse firm performance. In fact, results do not provide any evidence that company performance during the crisis was related to …

Impact Of The Federal Estate Tax On The La Dodgers, Mark Gose

CMC Senior Theses

This paper addresses the impact of the federal estate tax on a family-run business as well as the optimal estate planning techniques that can be implemented to ease the estate tax burden.

Do Investors View Excess Capacity As A Determinant Of Mergers And Acquisitions In The Pharmaceutical And Biotechnology Industry?, Jennifer M. Volk

CMC Senior Theses

I examine investors’ reaction to the announcement of mergers and acquisitions in the pharmaceutical and biotechnology industry from 2002 to 2008. Over this period, investors anticipate the announcements, as demonstrated by the fact that the cumulative abnormal returns are not statistically significant. In addition, I test to determine the effect of excess capacity on investors’ reactions. From 2002 to 2004, investors do not recognize acquisitions as a response to excess capacity, as the excess capacity measures utilized have no effect on the size of the cumulative abnormal return. From 2005 to 2008, however, excess capacity measures have a positive effect …