Open Access. Powered by Scholars. Published by Universities.®
Business Law, Public Responsibility, and Ethics Commons™
Open Access. Powered by Scholars. Published by Universities.®
- Discipline
Articles 1 - 2 of 2
Full-Text Articles in Business Law, Public Responsibility, and Ethics
The Wall Street Gap: A Theoretical Analysis Of Company Valuation Discrepancy, Peter Twomey
The Wall Street Gap: A Theoretical Analysis Of Company Valuation Discrepancy, Peter Twomey
Undergraduate Economic Review
Examination of prior research suggests that affiliated sell-side analysts are subject to conflicts of interest that cause them to issue optimistically biased stock recommendations for investment banking clients. Using a sample of public technology companies, I find that analysts have a theoretical discrepancy of up to 26% when valuing companies using a discounted cash flow model, and a 19-22% theoretical discrepancy when using comparable company analysis. I showcase how conventional valuation methodologies can allow sell-side analysts significant leeway that can be used to further unethical agendas and draw conclusions around the usefulness of regulatory intervention in the financial services industry.
The Impact Of Sustainability Reporting On Firm Profitability, Lancee L. Whetman
The Impact Of Sustainability Reporting On Firm Profitability, Lancee L. Whetman
Undergraduate Economic Review
Using a hand-collected representative sample of 95 publicly traded American firms from various sectors in 2015-2016, I examine how corporate sustainability reporting affects the financial performance of firms. I find a positive and significant effect of sustainability reporting on a firm’s return on equity, return on assets, and profit margin in the subsequent year. However, this relationship is found only for firms with low institutional ownership. These results suggest that sustainability reporting would be a worthwhile use of corporate resources for this subset of firms. Further, corporate sustainability reporting is shown to be an effective substitute for monitoring by institutional …