Finance and Financial Management Commons^™

Building A Future Microfinance Community In Kenya, Jack Spiehs

Senior Theses

The lack of access to financial tools has been a significant problem in many areas around the world for a long time. It prevents certain groups of people from being able to progress financially and improve their economic standing. This issue stems from an overall lack of resources and infrastructure in the area. Without the acquisition of new funds, there is no path to poverty alleviation in underdeveloped areas. Currently, the global response has been to try to provide these resources through various methods, including microfinance activities.

Microfinance institutions have been operating in Kenya for decades. They provide a variety …

Esg Investing: From Fad To Force, Erin Cullen

Senior Theses

ESG Investing is the application of environmental, social, and governance factors to identify material investment risks and growth opportunities. Though traditionally viewed as non-financial factors, this paper asserts that ESG factors are indeed financially material. This work first surveys the current state of ESG Investing, its shortcomings, and its success despite these inherent issues. Section II adds a new perspective to ESG research by examining the applications of ESG scores in portfolio management. The study conducts t-tests to answer whether the typical holdings of an ESG mutual fund are more sustainable than those of traditional funds. The paper then focuses …

Yield Generation Using Decentralized Financial (Defi) Applications, Nathan Walton

Senior Theses

Decentralized financial (DeFi) applications are a new generation of financial service applications, composed of coded smart contracts, and deployed on a blockchain network. These applications offer several methods of generating yield on deposited funds, much like a traditional bank. In this paper I provide a definition of several key terms and a breakdown of the primary mechanisms through which yield is generated. Additionally, I examine three of the main types of DeFi applications, the services they provide, and how they execute these services. I then provide an overview of four strategies involving cash and leverage and estimate the potential benefits …

Roles Of Acquirer Financial Advisors In M&A Deal Completion, Scarlett Pho

Senior Theses

The central theme that this thesis addresses is the role of valuation by investment banks who act as financial advisors to M&A buyers by answering two questions relating to the process. The first question is if buyers should hire investment banks for a higher chance of success of deals. For the second question, I will examine buyers who hire investment banks for some certain characteristics of deals. This study focuses on M&A deals that happened between 2012 and 2015, especially between advisor and nonadvisor, successful and failed deals. The conclusion presented in this thesis will be contributable to the understanding …

The Financial Impact Of Covid-19 On Nonprofit Organizations, Dr. Charles Harrington

SC Upstate Research Symposium

Abstract — Scholars and practitioners have argued that effective financial management, particularly the development of operating reserves, can help nonprofits survive economic shocks. The COVID-19 pandemic, which has had a significant impact on the nonprofit sector, provides an opportunity to test whether nonprofits have followed that recommendation, and if so, whether nonprofits with operating reserves were better prepared for the pandemic. Using data from an original survey of more than 600 nonprofit human service and arts organizations, administered when most states had stay-at-home restrictions, we show that most nonprofits experienced an immediate impact on their programs and financing. Yet, those …

The Budding Disruption Of Blockchain Technology Upon The Current Structure Of The Music Industry, Bradley Rauman

Senior Theses

One of the most pertinent opportunities within the music industry, and many other industries as well, stems from the use of blockchain technology. Blockchain’s core technology, which enables smart contracts and non-fungible tokens (NFTs), could be used to restructure and decentralize the music industry to be in alignment with the best interests of artists - the individuals responsible for driving the success of this industry.

The current system is outmoded. It evinces a disparity in the level of information held by artists and intermediaries (i.e. labels, publishers, and streaming services) and this disparity enables intermediaries to deduct egregious fees that …

Contemporary Investment Strategies And Comparison Applications Of Bitcoin, William Gregg Vi, Thanh Nguyen

University of South Carolina Upstate Student Research Journal

Bitcoin is an effective component to any investor's portfolio. The purpose of this research paper was to study the capabilities Bitcoin has to investors and anyone interested in learning more about cryptocurrencies. What are the strategic applications of Bitcoin and why should it be used over other types of assets? Bitcoin offers diversification capabilities to commodities, equities, bonds, the U.S. dollar, and most stock market indices. It can offer hedging capabilities against the U.S. dollar, Ethereum, stock market indices, and commodity uncertainty. The Financial Times Stock Exchange 100 (FTSE100) is an example of an index that Bitcoin can hedge against. …

Permanent Equity: Successfully Finding And Buying A Small Business, Lewis Wang

Senior Theses

This thesis aims to build off the existing research on the advantages of permanent equity within the micro-cap market space. This strategy combines many advantages from private equity, venture capital, small-cap, and value / quality investing in order to generate a differentiated return. While the pros and cons of these various strategies have been explored by previous academic research, not much has been written on the actual implementation and choices practitioners must make when they decide how to deploy capital. In order to dive deeper into implementation, this thesis presents several anecdotes of various firms that invest in this space …

The Adoption Of Cryptocurrency Technology Into The Us Banking Infrastructure, Trevor Melito

Senior Theses

This thesis examines the possibility of using Blockchain technology to permanently change the payment structure of the US banking system. First, I examine the current technology that dominates the banking sector. I introduce the most frequently used payments methods including Automatic Clearing House transfers and wire transfers, both domestically and internationally. In addition, I highlight the major players controlling these transactions. Under the current system, frictions between senders and receivers cause billions of dollars in losses each year.

Next, I examine Blockchain’s roots along with some similar cryptocurrency technology, namely Distributed Ledger Technology and Smart Contracts. The transparency, security, and …

Preparing For The Future: The Effects Of Financial Literacy On Financial Planning For Young Professionals, Tanay Singh

Senior Theses

Purpose – Many people between the age of 20 and 34 have not considered planning financially for the future in any significant capacity and in doing so, they limit their potential savings. The purpose of this study is to examine what financial expectations are for people in the early stages of their career and determine if improving financial literacy and revealing financial realities helps to produce more accurate or realistic expectations. Ultimately, the goal is to better prepare participants in the study for the working world and increased responsibilities outside of the college/university environment by getting them to start thinking …

Nonprofit Reputation And Bitcoin Use, Crystal A. Evans, Abigail B. Schneider

Journal of Ideology

In recent years, cryptocurrencies, digital assets used as mediums of exchange that use cryptography to secure the creation and exchange of the currency, have gained in popularity. One cryptocurrency in particular, Bitcoin, has received a considerable amount of attention in the media. As the general public’s awareness of Bitcoin increases, one must consider the impact that aligning a nonprofit with such a currency could have. The present research uses three studies to examine the impact that advertising the nonprofits’ alignment with Bitcoin has on perceived effectiveness as well as potential donors’ attitudes toward investing nonprofits’ assets in the currency. Results …

Cryptocurrencies: Their Current Validity And Future As Currency And As A Part Of An Investment Strategy, Austin R. Johnson

Senior Theses

This paper examines the current and future prospects of cryptocurrencies with a focus on the most well-known and highest valued cryptocurrency, Bitcoin. Specifically, it will address how Bitcoin can be utilized as a currency and as part of an investment strategy and whether its utilization makes financial sense now and will in the future. The paper showcases the past behavior of Bitcoin, how the Bitcoin system functions, how Bitcoin acts as a currency, how Bitcoin can be used as an investment asset, and why it will continue to be employed as such in the future. This paper will show that …

17 Days: Cross-Country With Social Media, Zachary Alvarado

Senior Theses

"Austin Prescott and Zach Alvarado travel from South Carolina to California using social media to find and communicate with hosts throughout the country..."

https://www.youtube.com/watch?v=V8k6EQnW5D4

Costs of investment were weighed against capital contributions throughout our campaign. While the film serves to inspire, entertain, and inform, the paper dives deeper into the brand-building, cost-savings, and logistics of the trip. In the end, we more than doubled our initial investment and had an awesome time while doing it.

Financial Literacy In South Carolina, Connor Pestovich, Matthew Travis

Senior Theses

Being wise with finances is a skill that many people tend to overlook as important. There are days when an individual can avoid using certain subjects learned in high school, but very rarely, if ever, is there a day when topics of finance are not used. This could be anything from purchasing food, driving to work, working on a computer, or receiving a paycheck. While most would agree that the ability to handle money wisely is very important, these concepts do not have a high priority of being taught in high schools in South Carolina. More than that, many parents …

The Implementation Of Financial Literacy Education In Public High School Classrooms, Shelby Olsen

Senior Theses

Due to the changing financial marketplace and the increased burden of financial decisions upon consumers there is a need for increased financial literacy among consumers. This thesis discusses and assesses promoting financial literacy within public high school classrooms to help provide students with the financial knowledge to confidently make informed financial decisions during their transition towards independence and into their adult lives. A strong financial literacy initiative within public high schools will help close the financial literacy gap created by little to no concrete financial education or parental background knowledge. This thesis will compile readily available curriculums and materials on …

Active Vs. Passive Management: The Elusiveness Of Alpha To The Modern Hedge Fund, Robert Wesley Long Jr

Senior Theses

The goal of this thesis stated off with one question: are hedge funds worth the fees? This seemed like it would simple to answer, but the measurement of hedge fund performance turned out to be far more complex than one would imagine. The first complexity that became apparent was the bias to overly weight returns as a measure of performance. This is the simplest metric to comprehend and universally can be understood by investors. It seems like common sense that the fund with the highest return would be the best investment opportunity. But this rush to judgment often overlooks other …

The Business Of Dentistry: A Financial Plan, Katherine Elizabeth Stewart

Senior Theses

At the University of South Carolina, I have taken action to find different ways to be more involved in my local community and to help families and people from underrepresented societies. While it is important to have this overarching goal, I have always wondered how I will be able to finance my goal so that I can have the money, supplies, and human capital to give back to communities in need. Through my thesis I have been able to create a business plan for a future dental practice in the Charlotte, NC metropolitan region. This business plan includes a financial …

The Effect Of Mortgage Timeline On The Investor's Portfolio, Grace Marie Wylie

Senior Theses

This thesis project creates a hypothetical situation in which individuals choose either a thirty-year or fifteen-year fixed-rate mortgage on the same house at the same time and uses historical data to simulate the stock portfolios resulting from investment strategies based on this choice. Both strategies have the same time horizon and total monthly payment, so investors should be indifferent between the two. Using the fifteen-year strategy, the investor pays a higher mortgage payment every month for fifteen years then invests the entire amount of the payment in the stock market monthly for the next fifteen years. Using the thirty-year strategy, …

Inked With Debt: An Overview Of The Student Debt Market And A Potential For Change, Brian Alexander Kean

Senior Theses

In a world of rapidly escalating amounts of student debt, the current system harms college stakeholders. Whether governments (state or federal), students, universities, or the economy, all parties are suffering in the current student debt market. At this point in time, student loans have become a sizeable debt vehicle second only to mortgage debt in the United States. A majority of students use loans to attend school, which often become a major decision in post-graduation plans. In addition, it is the only form of debt not dischargeable in bankruptcy. Due to this, an alarming amount of Americans have become ensnared …

Commonalities Of Asset Pricing Bubbles, Lauren Frances Pensegrau

Senior Theses

The focus of this thesis will be to examine the similarities between the 2007-2008 Subprime Mortgage Crisis and other crises resulting from the collapse of an asset pricing bubble throughout United States financial history. Particular emphasis will be placed on the real estate and stock bubbles of the 20th century, including the events leading up to the Great Depression and the Savings and Loan (S&L) crisis of the late 1980s. I explore commonalities throughout the life cycle of a bubble, from the catalysts that lead to bubble formation, to the drivers that fuel both expansion and collapse, and finally, the …

Vulnerability And Resistance: An Evaluation Of Hostile Takeover Defenses Proposed By: Carissa Wilson, International Business & Business Economics, Carissa Laurel Wilson

Senior Theses

Within the context of mergers and acquisitions (“M&A”), hostile takeovers comprise a complex and pivotal area of study. It is hostile takeovers, rather than friendly ones, that give rise to the need for most buy- and sell-side tactics related to strategic M&A. This paper focuses primarily on sell-side tactics, or “target defenses,” used to deflect undesired takeover attempts and prevent changes in corporate control. It will attempt to present a high level, comprehensible, and comprehensive listing of defensive tactics in the target arsenal, with references to related case law.

Target defenses developed preemptively, or before an official takeover offer has …

The Historical Role Of The Use Of Derivatives For Speculation, Charles Austin Boyd Ii

Senior Theses

As long as humans have had a concept of possession of items and a means of trading for them, there have been speculative position in the form of derivative contracts. The first instance of a written code of laws contains protection for farmers leveraging their future crops. Aristotle writes of an instance of the equivalent of call options being used to secure a monopoly on olive presses. Many features of contemporary derivative markets were developed in Europe during Medieval trade fairs or Renaissance bourse marketplaces. The development of the first modern stock exchange brought with it further development in the …

Economic Development Incentives And The Legal And Economic Issues Of Open Versus Sealed Bids, Sherry L. Jarrell, J. Neal Robbins, Gary L. Shoesmith, Brendan A. Fox

South Carolina Journal of International Law and Business

No abstract provided.

The Macroeconomic News Cycle And Uncertainty Resolution, Arjun Chatrath, Rohan Christie-David, William T. Moore

Faculty Publications

We examine the behavior of return volatility and trading at 5-minute intervals in the treasury bond futures market in the context of the monthly macroeconomic news cycle. We advance and confirm the hypothesis that volatility and trading activity are higher in the first half of the month. The data indicate that these patterns arise from at least two sources: (1) a higher level of uncertainty regarding the value of news in announcements in the first half of the month, and (2) improvement in efficiency of macroeconomic forecasts from the first to the second half of the month.

The Dynamics Of Market Entry: The Effects Of Mergers And Acquisitions On Entry In The Banking Industry, Allen N. Berger, Seth D. Bonime, Lawrence G. Goldberg, Lawrence J. White

Faculty Publications

We study the dynamics of market entry following mergers and acquisitions (M&As) using banking industry data. The findings suggest that M&As are associated with statistically and economically significant increases in the probability of entry. The data suggest that M&As affect the proportion of the markets with entry by about 10-20%. These findings also suggest that entry may be part of an "external" effect of M&As that helps supply credit to some relationship-dependent small business borrowers. Our results are robust to the use of alternative econometric methods, changes in specifications of the exogenous variables, and alteration of the data samples.

The Value Of Open Market Repurchases Of Closed-End Fund Shares, Gary E. Porter, Rodney L. Roenfeldt, Neil W. Sicherman

Faculty Publications

The authors illustrate the value to shareholders when closed-end funds repurchase shares at a discount from net asset value. Repurchases increase share price even when there is no asymmetric information concerning the value of the underlying assets and the percentage discount remains unchanged following the repurchase. Expected gains to shareholders are derived from capturing the discount on the assets associated with the shares repurchased. In an analysis of 27 open market repurchase announcements by closed-end funds, the regression coefficient estimate that measures the association between the actual excess return and the expected increase in share price is essentially 1.0.

Race, Redlining, And Automobile Insurance Prices, Scott E. Harrington, Gregory R. Niehaus

Faculty Publications

Following Becker's (1993) suggestion that tests for discrimination should attempt to infer whether profits differ for products sold to minorities and nonminorities, this article tests the hypothesis that racial discrimination affects market prices of auto insurance in Missouri. Compared with tests for discrimination in lending markets, our results are less susceptible to bias from omitted variables.Controlling for available demographic and coverage- related factors, we do not find that loss ratios at the zip-code level are negatively related to percent minority population. This finding is inconsistent with the hypothesis that racial discrimination increases premiums relative to expected claim costs for minorities.

The Coexistence Of Multiple Distribution Systems For Financial Services: The Case Of Property-Liability Insurance, Allen N. Berger, J. David Cummins, Mary A. Weiss

Faculty Publications

Property-liability insurance is distributed through a direct-writer system, where agents represent one insurer, and an independent- agency system, where agents represent several insurers. Independent-agency insurers have higher costs than direct writers. The market- imperfections hypothesis attributes the coexistence of the two types of insurers to impediments to competition, while the product-quality hypothesis holds that independent-agency insurers provide higher-quality services. We measure cost efficiency and profit efficiency for property-liability insurers and find strong support for the product-quality hypothesis, implying that independent-agency insurers produce higher-quality outputs and are compensated by higher revenues.

On The Information Content Of Calls Of Convertible Securities, Anthony K. Byrd, William T. Moore

Faculty Publications

Negative stock price reactions to conversion-forcing calls of convertible bonds and preferred stocks are reexamined, and most of the sample firms are shown to exhibit full price recovery by the end of the conversion period. In addition, analysts' earnings forecasts, both short-term and long-term, are found to be revised upward following call announcements for convertible bonds and preferred stocks. The combined findings cast doubt on the established belief that such capital structure decisions signal negative information about firm value.

Relationship Lending And Lines Of Credit In Small Firm Finance, Allen N. Berger, Gregory F. Udell

Faculty Publications

This article examines the role of relationship lending in small firm finance. It examines price and nonprice terms of bank lines of credit (L/Cs) extended to small firms. The focus on LICs allows the examination of a type of loan contract in which the hank- borrower relationship is likely to be an important mechanism for solving the asymmetric information problems associated with financing small enterprises. We find that borrowers with longer banking relationships pay lower interest rates and are less likely to pledge collateral.These results are consistent with theoretical arguments that relationship lending generates valuable information about borrower quality.