Finance and Financial Management Commons^™

Banking On The Euro: Changes And Challenges, William Templeton, Charlotte Bond

William K. Templeton

Note: full-text not available due to publisher restrictions. Link takes you to an external site where you can locate the article at your local library.

Considers the likely effects of EMU and the introduction of the euro on the “fragmented” European banking industry. Recognizes that transition to the euro will be expensive in terms of equipment, training, customer care etc.; and that some new products and services will be demanded (e.g. cross-border cash management systems, euro-denominated bonds etc.) while others will decline (e.g. foreign exchange hedging, commercial loans etc.). Refers to US experience to identify growth opportunities and discusses the …

Poison Pills, Optimal Contracting, And The Market For Corporate Control: Evidence From Fortune 500 Firms, Atreya Chakraborty

Atreya Chakraborty

The rationale for issuing poison pill securities remains unclear, despite the findings of a large body of prior research that these defenses adversely affect shareholder wealth. This paper investigates the hypothesis that the adoption of such defenses may reflect shareholders’ desire to contract efficiently with their managers in an environment characterized by hostile takeovers and uncertainty about the managers’ true performance. Unlike previous research, we focus on financial characteristics of firms as they relate to the motives for adopting such defenses. Our empirical research does not support the optimal contacting hypothesis. We interpret our results as supportive of the managerial …

Dynamic Futures Hedging In Currency Markets, Atreya Chakraborty

Atreya Chakraborty

The hedging effectiveness of dynamic strategies is compared with static (traditional) ones using futures contracts for the leading five currencies. The traditional hedging model assumes time invariance in the joint distribution of spot and futures price changes thus leading to a constant optimal hedge ratio (OHR). However, if this timeinvariance assumption is violated, time-varying OHRs are appropriate for hedging purposes. A bivariate GARCH model is employed to estimate the joint distribution of spot and futures currency returns and the sequence of dynamic (time-varying) OHRs is constructed based upon the estimated parameters of the conditional covariance matrix. The empirical evidence strongly …

Positively Influencing Physicians: The Levers Of Influence, William Marty Martin

William Marty Martin

No abstract provided.

Uncertainty In Executive Compensation And Capital Investment: A Panel Study, Atreya Chakraborty

Atreya Chakraborty

We investigate whether uncertainty in CEO compensation influences the firm's investment decisions. We use panel data on compensation to estimate CEO income uncertainty and cross-sectional investment data to measure capital investment. Given the prospect of bearing extra risk, a rational agent reacts to minimize the impact of such risk. We provide evidence that CEOs with high earnings uncertainty invest less. We find that the negative impact of permanent earnings uncertainty on firm investment is larger than that of transitory earnings uncertainty. Our results are robust to several alternate specifications and can be helpful in building compensation packages that lead to …

Customer Profitability: The Approach Counts, Mark E. Pickering

Mark E Pickering

This article looks at alternative approaches to calculating customer profitability. It recommends a customer-focussed approach that takes into account the specific resources utilised to service each customer segment. In using customer profitability to make strategic and operational decisions it is vital that only costs relevant to those decisions are utilised.

A Binomial Lattice Approach For Valuing A Mining Property Ipo, Simone Kelly

Simone Kelly

The last decade has witnessed an emerging literature that applies option pricing methods to evaluate claims on real assets. Previous research has applied option pricing to the optimal investment timing decision for the firm. This paper applies a binomial lattice approach to the valuation of a gold mine at the time of its initial public offering. The paper has two goals: (1) to demonstrate how to derive the value of the investment timing option using publicly available information contained in a prospectus, and (2) to relate the value derived from the option model to the final offer price of the …

The Performance Of Initial Public Offerings In The Biotechnology Industry, Todd A. Finkle, Dan French

Todd A Finkle

As Easy As Abc - An Introduction To Activity Based Costing, Mark E. Pickering

Mark E Pickering

This article is an introduction to the concepts and mechanics of Activity Based Costing and how it can be used to provide different views of the costs and profitability of organisations to support management decisions.

Ricardian Equivalence: Further Evidence, Atreya Chakraborty

Atreya Chakraborty

The Ricardian Hypothesis states that for a given level of government expenditure, aggregate demand is neutral to changes in the debt-to-tax ratio. Many economists argue that the private and government sectors have different planning horizons which will lead to deviations from Ricardian equivalence. In this paper, by using a model that nests both Ricardian equivalence and an alternative hypothesis, we empirically investigate whether the private sector has a shorter planning horizon than the government sector. The evidence presented in this study suggests that there is no difference between the planning horizons of the private and government sectors.

Public Information Arrival, Thomas Berry, Keith Howe

Thomas D Berry

The authors develop a measure of public information flow to financial markets and use it to document the patterns of information arrival, with an emphasis on the intraday flows. The measure is the number of news releases by Reuter's News Service per unit of time. The authors find that public information arrival is nonconstant, displaying seasonalities and distinct intraday patterns. Next they relate their measure of public information to aggregate measures of intraday market activity. The authors' results suggest a positive, moderate relationship between public information and trading volume but an insignificant relationship with price volatility. Copyright 1994 by American …

Agency Costs, Charter Amendments And The Market For Corporate Control, Atreya Chakraborty

Atreya Chakraborty

The merger wave of the 1 980s, coupled with the sophistication of investment Banks' financial engineers, brought about a bewildering array of takeover defenses: "poison pills", " classified boards", "fair price amendments", and the like. Surveys have documented steep growth in various defensive amendments adopted by firms in recent years. The Investors? Responsibility Research Centre (IRRC), in surveying 424 of the Fortune 500 firms in 1986, found that 143 had adopted poison pills, 158 had fair price amendments and 223 had board of directors divided into classes. Jarrell and Poulsen's (1987) research notes the same trend in a previous survey …

Intensity Of Takeover Defenses: The Empirical Evidence, Atreya Chakraborty

Atreya Chakraborty

This paper focuses on the construction of an index of the intensity of firms' antitakeover defenses. While many aspects of corporate behavior are qualitative in nature, an evaluation of a firm's stance and the underlying motives for its behavior often depend on the elements of a set of qualitative factors. The interactions between these factors are likely to have important implications. In this context, only a composite measure will capture these interactions and their implications for firms' actions. We focus on the creation of an ordinal measure of anti-takeover defenses and utilize the ordered probit estimation technique to relate the …

A Multi-State Analysis Of The Tjtc, Thomas Berry, Julia Lane

Thomas D Berry

No abstract provided.

Risk-Return And The Relative Pricing Of Darp, Thomas Berry, John Houston

Thomas D Berry

No abstract provided.

Some Guidelines For Assessing The Size Of Lack-Of-Marketability Discounts, Thomas Berry, Don Shannon

Thomas D Berry

No abstract provided.

The Leverage Problem In The Valuation Of Privately Held Firms, Thomas D. Berry, John Houston

Thomas D Berry

No abstract provided.

A Survey Of Introductory Financial Managment Courses, Thomas Berry, Edward Farragher

Thomas D Berry

No abstract provided.

The Relationship Of Corporate Policy Decisions And Financial Leverage: An Empirical Analysis, Thomas Berry, John Houston

Thomas D Berry

No abstract provided.

The Impact Of Federal Tax Changes Of The Cost Of Debt For State And Local Governments, Thomas Berry, Edward Farragher

Thomas D Berry

No abstract provided.

Fnma Mortgage Commitments As Put Options: An Empirical Examination, Thomas Berry, Adam Gehr

Thomas D Berry

The Federal National Mortgage Association (FNMA) auctions commitments to purchase mortgages. An examination of the terms of the commitment contract shows that these commitments are actually put options on mortgages. The contract is unusual, however, in that the price of the commitment is a fixed percentage of the value of the mortgages. In the auction, the dealers effectively bid the exercise price at which they would be willing to pay the fixed commitment price. In this paper, we study the economics of the FNMA auction. We use a two-state approximation to the American put pricing model for interest-dependent securities to …

State Variation In The Targeted Jobs Tax Credit Program, Thomas Berry, Julie Lane

Thomas D Berry

No abstract provided.

A Short-Run Model Of Regional Housing Demand, Thomas Berry

Thomas D Berry

No abstract provided.

Fnma Auction Results As A Forecaster Of Residential Mortgage Yields, Thomas Berry, Adam Gehr

Thomas D Berry

No abstract provided.

An Alternative Methodology For Developing Certainty Equivalents, Thomas Berry, Bill Poppie

Thomas D Berry

No abstract provided.

The Choice Of Money Market Fund, Thomas Berry

Thomas D Berry

No abstract provided.