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Articles 1 - 16 of 16
Full-Text Articles in Finance and Financial Management
Distribution Method Choice, Ian Sharpe, Li-Anne Woo
Distribution Method Choice, Ian Sharpe, Li-Anne Woo
Li-Anne Woo
Using unique Australian data we examine the choice of issuance mechanism for unseasoned equity (between initial public offers and direct placements) prior to exchange listing. Controlling for liquidity in the decision to go public and incorporating interrelated decisions, we find that corporate control concerns and expected underpricing differences between initial public offers and direct placements play an important role. Also the probability of an initial public offer (direct placement) decreases (increases) with information asymmetry and the reputation of the issuer. Further, the choice of issuance mechanism and the underpricing, issue size and ownership retention decisions are interrelated.
Expert Recommendations In The ‘Dartboard’ Column, William Bertin, Laurie Prather
Expert Recommendations In The ‘Dartboard’ Column, William Bertin, Laurie Prather
Laurie Prather
For many years the Wall Street Journal’s "Your Money Matters" column has conducted monthly stock selection contests where random "dartboard portfolios" have been pitted against professional stock analysts’ portfolios. In the professional portfolios, four stocks are selected by four experts, while the dart portfolios consists of four stocks randomly selected by Wall Street Journal staff members throwing darts onto a dartboard containing all stock listings from the NYSE, AMEX, and NASDAQ. In both portfolios each stock is given an equal weight of 25 percent. The returns for each stock are computed over a six-month holding period, and the portfolio returns …
Mutual Fund Characteristics, Managerial Attributes, And Fund Performance, Laurie Prather, William Bertin, Thomas Henker
Mutual Fund Characteristics, Managerial Attributes, And Fund Performance, Laurie Prather, William Bertin, Thomas Henker
Laurie Prather
This study provides a comprehensive examination of recent mutual fund performance by analyzing a large set of both mutual funds and fund attributes in an effort to link performance to fund-specific characteristics. The results indicate that the hypothesized relationships between performance and the explanatory variables are generally upheld. After taking into consideration general market conditions and fund investment objective, the characteristic variables that relate to fund popularity, growth, cost, and management also explain performance. Finally, after controlling for survivorship and benchmark error as well as fund-specific factors, the results refute the performance persistence phenomenon.
Decomposing The Bid-Ask Spread Of Stock Options: A Trade And Risk Indicator Model, David Michayluk, Laurie Prather, Li-Anne Woo, Henry Yip, William Bertin
Decomposing The Bid-Ask Spread Of Stock Options: A Trade And Risk Indicator Model, David Michayluk, Laurie Prather, Li-Anne Woo, Henry Yip, William Bertin
Laurie Prather
This paper extends Huang and Stoll (1997) to develop a spread decomposition model that includes the costs of trading that are specific to the options market. The trade and risk indicator (TRIN) model includes separate inventory cost components that reflect the market maker’s delta, vega, and gamma risk. We find that adverse selection accounts for only 5.53% of option spread, is positively related to liquidity and leverage, and is higher given negative trade imbalances. Of the inventory risk, gamma risk is the largest component (7.01%), surpassing adverse selection risk, while vega risk accounts for 5.16% and delta risk is 4.12%.
The Company Dividend Restriction: Does It Promote Good Corporate Governance?, James Routledge, Peter Slade
The Company Dividend Restriction: Does It Promote Good Corporate Governance?, James Routledge, Peter Slade
James Routledge
This article considers aspects of the development of the law associated with the dividend payment restriction. The motivation for the article is to assess whether the existing substantive law is effective in promoting sound decision-making by corporate officers who are required to determine the timing and quantum of dividend payments. Our analysis suggests that the existing provision in s 254T of the Corporations Act 2001 is unlikely to have a significant positive effect on dividend decisions. This is due to its failure to provide meaningful guidance to decision-makers; its divergence from contemporary accounting practice; and its imposition of unnecessary complexity …
Assessing Solvency For Financially Distressed Companies, James Routledge, Ray Mcnamara
Assessing Solvency For Financially Distressed Companies, James Routledge, Ray Mcnamara
James Routledge
This article reviews past and recent authorities that have addressed the definition and application of the solvency test in s 95A of the Corporations Act 2001 (Cth). The discussion highlights that, when faced with financial distress, company directors need to carefully consider the solvency implications of their decisions. To generate cash to pay debts as they become due, directors may attempt to realise company assets, obtain additional secured or unsecured debt finance or reorganise the timing of payments with creditors. The discussion of relevant cases shows that the solvency implications associated with realisation of assets, use of assets as security …
The Effect Of Changing Firm Characteristics On Capacity To Restructure, James Routledge, David Gadenne
The Effect Of Changing Firm Characteristics On Capacity To Restructure, James Routledge, David Gadenne
James Routledge
This paper examines whether changes in financial characteristics over the time prior to a firm entering insolvency administration will affect its reorganisation prospects. Prior research shows that an insolvent firm’s ability to rectify the mismatch between currently available liquid assets and current financial obligations is critical to the reorganisation outcome. Accordingly, a multivariate analysis of financial characteristics which reflect the firm’s ability to address this mismatch is presented. The results show that changes in operating performance and liquidity prior to a firm entering insolvency administration have a bearing on administration outcomes.
The Decision To Enter Voluntary Administration: Timely Strategy Or Last Resort?, James Routledge
The Decision To Enter Voluntary Administration: Timely Strategy Or Last Resort?, James Routledge
James Routledge
One of the options available to directors of financially distressed companies is to place their company into voluntary administration (VA). The decision to enter VA should enhance corporate governance because it allows for informed decision-making about a company's future, and ensures that administration of a company's affairs proceeds in an orderly manner. Once in VA, a company has a short 'breathing space' during which it can develop a strategy to address its insolvency. The strategic options available will be significantly affected by past performance and current financial position. If the company's position has deteriorated significantly, the VA process will merely …
Transaction Sizes And Spreads: An Informational Approach, David Feldman, Thomas Henker, Robert Kohn, Yuewen Xiao
Transaction Sizes And Spreads: An Informational Approach, David Feldman, Thomas Henker, Robert Kohn, Yuewen Xiao
Thomas Henker
We introduce an informational approach (IA) for exploring association between variables, an alternative to the prevalent parametric, thus restrictive, regression analysis. The IA uses data to (non-parametrically) construct the joint distribution of variables. Then, it uses theory to develop restrictions on the joint distributions. These restrictions will typically be orderings of functions of conditional distributions induced by the joint distribution. Finally, it attempts refuting the restrictions. We implement IA examining the relation between trading sizes and spreads, a main concern. Following insights and results of Milgrom (1981), Feldman (2004), and Feldman and Winer (2004), we use NYSE data and kernel …
Was Financial Market Contagion The Source Of Economic Crisis In Asia? Evidence Using A Multivariate Var Model, Ahmed Khalid, Masahiro Kawai
Was Financial Market Contagion The Source Of Economic Crisis In Asia? Evidence Using A Multivariate Var Model, Ahmed Khalid, Masahiro Kawai
Ahmed Khalid
The episodes of financial crises in many parts of the world during the 1990s have sparked interest in identifying channels through which such crises spread from one country to another. Researchers have identified several factors that may have sparked and induced contagion. This study further extends the existing research by identifying and testing three financial market variables to trace the alleged origin and the subsequent path of the contagion during the 1997 Asian Crisis. Foreign exchange rates, stock market prices and interest rates are three main financial market indicators, representing the currency, stock and money markets, respectively. We use a …
The Yuan Stops Here: Can Shanghai Overtake Hong Kong As China's Financial Center?, Jack Marr
The Yuan Stops Here: Can Shanghai Overtake Hong Kong As China's Financial Center?, Jack Marr
Jack Marr
No abstract provided.
Liquidity Issues Surrounding Neglected Firms, William Bertin, David Michayluk, Laurie Prather
Liquidity Issues Surrounding Neglected Firms, William Bertin, David Michayluk, Laurie Prather
Laurie Prather
The neglected firm effect is the phenomenon where stocks of less widely-known firms have larger returns than that predicted by asset pricing models. Researchers have found mitigating variables, such as the price of the stock, that have partially explained the performance of neglected firms. Neglect and price may be proxies for the liquidity of each firm's stock, and the higher observed returns may actually be a premium for the lack of liquidity. This paper compares two definitions of neglect and their relationship with liquidity. When neglect is measured by the number of analysts following a stock, more analysts are associated …
What Drives Tbl Reporting: Good Governance Or Threat To Legitimacy?, Pamela Kent, Reza Monem
What Drives Tbl Reporting: Good Governance Or Threat To Legitimacy?, Pamela Kent, Reza Monem
Pamela Kent
This paper provides two complementary explanations for the adoption of triple bottom line (TBL) reporting by Australian companies. The first explanation is that companies adopt TBL reporting to legitimise their relationship with society because of adverse publicity from the media. The second explanation is that TBL reporting is adopted because of the company’s desire to achieve high-quality reporting and transparency inferred by strong corporate governance. Companies with TBL reporting had significantly more adverse media coverage before implementing TBL reporting than non-TBL companies. TBL reporting is also significantly and positively related to the existence of an environmental or sustainable development committee …
Análisis De La Sostenibilidad Del Proyecto De Producción Y Venta De Huevos De La Granja Nueva Vida, Guatemala, Maria R. Ibanez
Análisis De La Sostenibilidad Del Proyecto De Producción Y Venta De Huevos De La Granja Nueva Vida, Guatemala, Maria R. Ibanez
Maria Ibanez
El presente documento analiza la sostenibilidad del proyecto de producción y venta de huevos de la Casa Nueva Vida, localizada en las cercanías de Santa Cruz de Quiché, Guatemala. En el primer apartado, se presentan los resultados del análisis financiero, en el segundo, el estudio de mercado, y en el tercero, las recomendaciones. Finalmente, se recogen las conclusiones del informe.
Anomaly Revisited: Seasoned Equity Offerings And The Operating Performance Of Reits, R. Roark
Anomaly Revisited: Seasoned Equity Offerings And The Operating Performance Of Reits, R. Roark
R. Scott Roark
No abstract provided.
The Operating Performance Of Seasoned Equity Issuers: The Case Of Reits Revisited, R. Roark
The Operating Performance Of Seasoned Equity Issuers: The Case Of Reits Revisited, R. Roark
R. Scott Roark
No abstract provided.