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Full-Text Articles in Corporate Finance
Profitability Ratios In The Early Stages Of A Startup, Erkki K. Laitinen
Profitability Ratios In The Early Stages Of A Startup, Erkki K. Laitinen
The Journal of Entrepreneurial Finance
This study develops a mathematical framework to analyze the time series of profitability ratios in the early stages of a startup. It is assumed that the expenditure of the startup grows at a steady rate and generates a proportionally identical flow of revenue in each period. The profitability in terms of the internal rate of return (IRR) and the lag structure of revenue flows are assumed constant over time in describing the adjustment process towards the steady state. The startup is assumed to expense in each period a constant part of periodic expenditure and beginning-of-the-period assets. The adjustment processes of …
News Management Around Equity Private Placements, Hsiao-Chen Liang, Woan-Yuh Jang
News Management Around Equity Private Placements, Hsiao-Chen Liang, Woan-Yuh Jang
The Journal of Entrepreneurial Finance
Private placement is the sale of securities to a limited number of qualified institutions or high-wealth investors. Although private placement is favorable for firms raising capital, it is relatively easy for managers to exploit it to benefit specific investors. Using a sample of Taiwanese private placements covering 2006 to 2010, we use both quantitative and qualitative variables to examine the determinants of the valence and tenor of media coverage around private placement announcements and study whether managers strategically perform news management. The results show that issuers will engage in news management around private placement announcements to facilitate the issue process. …
When The Going Gets Tough, The Tough Get Going, Antti Fredriksson, Daniela Maresch, Matthias Fink, Andrea Moro
When The Going Gets Tough, The Tough Get Going, Antti Fredriksson, Daniela Maresch, Matthias Fink, Andrea Moro
The Journal of Entrepreneurial Finance
A bank’s lending decision is affected by the amount of information it can access and by its capability to manage this information. The latter aspect implies that the bank has to decide whether borrowers should be managed in a local branch of the bank or in its headquarters. By looking at a sample of Finnish banks, the present research investigates a bank’s capability to extract profitability from both locally and centrally managed firms. We find that banks are able to properly discriminate between firms: those which should be managed by loan managers with expert knowledge in the bank’s headquarters due …