Corporate Finance Commons^™

The New Public/Private Equilibrium And The Regulation Of Public Companies, Elisabeth De Fontenay, Gabriel Rauterberg

Faculty Scholarship

This Symposium Article examines how the public/private divide works today and maps out some of the potential implications for major issues in securities law. Classic debates in securities law were often predicated on the idea that public companies are a coherent class of firms that differ markedly from private companies. For more than fifty years after the adoption of the federal securities laws, this view was justified. During that period, the vast majority of successful and growing private firms eventually accepted the regulatory obligations of being public in order to access a wider and deeper pool of capital, among other …

Examining Indenture Trustee Duties, Steven L. Schwarcz

Faculty Scholarship

This Chapter examines the duties of indenture trustees appointed under bond indentures. Although their post-default duties generally are subject to a prudent-person standard, indenture trustees have relatively little legal guidance concerning pre-default duties. The rise of activist investors, however, is making it increasingly critical to identify and understand how to perform those duties. This Chapter seeks to provide that understanding.

Cleaning Corporate Governance, Jens Frankenreiter, Cathy Hwang, Yaron Nili, Eric L. Talley

Faculty Scholarship

Although empirical scholarship dominates the field of law and finance, much of it shares a common vulnerability: an abiding faith in the accuracy and integrity of a small, specialized collection of corporate governance data. In this paper, we unveil a novel collection of three decades’ worth of corporate charters for thousands of public companies, which shows that this faith is misplaced.

We make three principal contributions to the literature. First, we label our corpus for a variety of firm- and state-level governance features. Doing so reveals significant infirmities within the most well-known corporate governance datasets, including an error rate exceeding …

The Giant Shadow Of Corporate Gadflies, Kobi Kastiel, Yaron Nili

Faculty Scholarship

Modern-day shareholders influence corporate America more than ever before. From demanding greater accountability of executives to lobbying for a variety of social and environmental policies, shareholders today have the power to alter how American companies are run. Amazingly, a small group of individual shareholders wields unprecedented power to set corporate agendas and stands at the epicenter of our contemporary corporate governance ecosystem. In fact, the power of these individuals, known as “corporate gadflies,” continues to rise.

Corporate gadflies present a puzzling reality. Although public corporations in the United States are increasingly owned by large institutional investors, much of their corporate …

Feedback’S Effect On Budgetary Slack And Self-Efficacy As Moderation Variable, Aryani Intan Endah Rahmawati, Supriyadi ,

Jurnal Akuntansi dan Keuangan Indonesia

This study aimed to examine the effect of positive and negative feedback on budgetary slack and the interaction between feedback and self-efficacy on budgetary slack under a condition of information asymmetry. Preliminary researches have tested various ways of mitigating budgetary slack practices, which did not separate the effects of positive and negative feedback. This study hypothesized that positive feedback minimizes the potential for budgetary slack under conditions of information asymmetry—and vice versa. Additionally, high self-efficacy reinforces positive feedback in reducing budgetary slack under conditions of information asymmetry—and vice versa. By employing experimental data, this study documented the results that positive …

The Obstacle Factors Of Musharakah And Mudharabah Application In Pakistan, Muhammad Arsalan Khan, Dodik Siswantoro, Abid Ur Rahman

Jurnal Akuntansi dan Keuangan Indonesia

Islamic Banking is based on the Islamic financial system. It is a banking system whose fundamental rules and regulations are established on Shariah laws i.e., Islamic jurisprudence originated from the Quran and Sunnah of the Prophet Muhammad peace be upon him. Its functions must comply with Shariah rules and must not violate any Shariah principle. The Islamic finance system is based on Profit-loss sharing financing namely, Musharakah and Mudharabah but there are numerous issues and challenges faced by Islamic bank during the implementation of Musharakah and Mudharabah financing contracts. The various paper has been revealed some of the internal and …

Accounting Information In The Fama And French Three-Factors Model, Rianty Nikita Lotazia Pondaag, Erni Ekawati

Jurnal Akuntansi dan Keuangan Indonesia

The purpose of this study is to reexamine the ability of the Fama-French Three Risk Factor Model to explain stock portfolio returns in countries with different economic levels, as well as examine the effect of accounting information derived from book-to-market on stock portfolio returns. The sample used was a manufacturing company on the Indonesia Stock Exchange and the Tokyo Stock Exchange from 2013-2018. The results show that the three risk factors of the Fama-French model apply consistently to explain the variation in stock portfolio returns in developed markets. For the portfolio of shares in the emerging market, model Fama-French does …

Foreign Institutional Shareholders And Corporate Payout Policy, Rahmat Setiawan, Nova Christiana, Sanju Kumar Singh

Jurnal Akuntansi dan Keuangan Indonesia

This study examines the effect of foreign institutional shareholders (FIS) on corporate payout policy. The study employs 97 Indonesian manufacturing firms listed on the Indonesia Stock Exchange period 2011-2015. Multivariate Tobit and Logit are employed to estimate the model. The result confirms the bird in the hand theory that FISs need assurance of their investments in the emerging market. FIS has a monitoring role over the firms since they have the ability to detect the firm’s quality and the agency problem within. The result confirms that the presence of the FIS in the firm has a positive and significant effect …

Predictive Value Of Other Comprehensive Income: Evidence From Asean, Puji Rahayu, Indra Wijaya Kusuma

Jurnal Akuntansi dan Keuangan Indonesia

This paper examines the predictive value of other comprehensive income and its disclosure in ASEAN. Unlike value relevance, the predictive value of other comprehensive income has not been extensively addressed in the literature. We conduct the first study examining the predictive value of other comprehensive income and its disclosure to prove that not only fair value as relevant information, but also other comprehensive income reflecting the changes of fair value. We use hand-collected data taken from the financial reports. This study employs a panel regression model to test the ability of other comprehensive income and its disclosure to predict firms’ …

Relationship Between Foreign Direct Investment And Stock Market Development In A Small Southern Africa Economy, Duduzile Ngobe, Kalu O. Emenike

Jurnal Akuntansi dan Keuangan Indonesia

This paper investigates the relationship between foreign direct investment and stock market development in a small southern African economy. Specifically, the paper analyses long-run, short-run and causal relationships between foreign direct investment and stock market development in Eswatini for the 1990 to 2018 periods. Results of preliminary analyses of the variable show existence of positive skewness, fat-tailed, non-normal distribution, and I(1) order of integration for the foreign direct investment and stock market return series. Estimates from the ARDL model indicate evidence of a positive and statistically insignificant long-run relationship between foreign direct investment and stock market development in the kingdom …

When Vertical Is Horizontal: How Vertical Mergers Lead To Increases In “Effective Concentration”, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This article explains the inherent loss of an indirect competitor and reduction in competition when a vertical merger raises input foreclosure concerns. We then calculate a measure of the effective increase in the HHI measure of concentration for the downstream market, and we refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward pricing pressure (“UPP”) involved in two alternative types of acquisitions: (i) vertical mergers that raise unilateral input foreclosure concerns (and the associated vertical GUPPI measures), and (ii) horizontal acquisitions of partial ownership interests among …

Corporate Sustainability, Rawan Barri

LSU New Orleans Theses and Dissertations

This dissertation consists of two essays that examine the role of corporate social responsibility (CSR) in finance. In the first essay, we examine the bondholder wealth effects of socially responsible firms. Using an extensive U.S sample from 2006 to 2016 and two methodologies – corporate yield spreads and bond credit ratings – we provide evidence that proactive environmental and social practices are reflected in the price of corporate bonds. Furthermore, we examine the impact of managerial ownership on the relationship between CSR and bondholder wealth effects. We postulate that higher equity ownership induces managers to take on more firm risk …

What Is The Riskfree Rate? A Search For The Basic Building Block, Aswath Damodaran

Journal of New Finance

In corporate finance and valuation, we start off with the presumption that the riskfree rate is given and easy to obtain and focus the bulk of our attention on estimating the risk parameters of individuals firms and risk premiums. But is the riskfree rate that simple to obtain? Both academics and practitioners have long used government security rates as riskfree rates, though there have been differences on whether to use short term or long- term rates. In this paper, we not only provide a framework for deciding whether to use short or long term rates in analysis but also a …

The Equity Premium In 150 Textbooks, Pablo Fernandez

Journal of New Finance

This article is based on a review of 150 textbooks on corporate finance and valuation published between 1979 and 2009 by authors such as Brealey, Myers, Copeland, Damodaran, Merton, Ross, Bruner, Bodie, Penman, Arzac etc. Analysis of the sample shows that the books’ recommendations regarding the equity premium range from 3% to 10%, and that 51 books use different equity premia on various pages. Moreover, the 5-year moving average is seen to have declined from 8.4% in 1990 to 5.7% in 2008 and 2009.

Some confusion arises from not distinguishing among the four concepts that the phrase equity premium designates: …

Otter Tail Corporation, Heather Strese

Dissertations, Theses, and Projects

In my valuation model I gathered Otter Tail Corporation’s financial statements, historical and industry data, public information and ratio analysis from Mergent Online, Yahoo Finance and Otter Tail Corporation’s 2018 annual report. I discount the expected free cash flows at the WACC and estimate that Otter Tail Corporation’s stock is price is at USD 56.36 per share as of November 1^st, 2019, given the small difference between my estimated price per share and the current price per share in the market, and consistent with the EV/EBITDA multiple, I recommend a HOLD on the stock of the company.

Contracting And Reporting Conservatism Around A Change In Fiduciary Duties, Daniel Bens, Sterling Huang, Liang Tan, Wan Wongsumwai

Research Collection School Of Accountancy

We exploit an influential 1991 Delaware court ruling to examine the impact of changes in managerial fiduciary duties on firms’ accounting and contracting choices. The ruling expanded directors’ fiduciary duties in favor of creditors and away from shareholders for a specific group of firms. Using a hand-collected sample of debt contracts around the ruling date, we find that, following the ruling, debt contracts of affected firms rely less on the use of income escalators (provisions in loan contracts which require changes in net worth to reflect losses in full, but only partially for gains and profits) and other conservative adjustments …

Value Creating Drivers For Effective Human Capital Management, Ser Keng Ang

Research Collection Lee Kong Chian School Of Business

It is common for modern-day corporate leaders and academic writers to make claim that human resources is one of the most important assets in their organization (Guest, 2001). If that were the case, effective management of human capital would be a critical factor in the success of any organization. As an important organizational resource, human capital is expected to generate significant economic benefits from its deployment, development and retention (Flamholtz, 1999). There is widespread evidence that the effective use of human capital can also create durable competitive advantage for an organization (Barney, 1991; Becker & Gerhart, 1996; Lado & Wilson, …

Sustainability Balanced Scorecard Architecture And Environmental Investment Decision Making: The Mediating And Moderating Effects Of Knowledge And Risk Indicators, Suaad Jassem

Student Works (2020-2029)

According to a survey by Bain and Company, the majority of the sustainability programs undertaken by global companies fail to meet their objectives. A part of the reason for such a dilemma is possibly due to the dearth of sufficient research on how investment and performance evaluation tools such as sustainability balanced scorecards architecture impact decisions taken by managerial decision-makers. Hence, this doctoral research endeavor extends the literature on sustainability balanced scorecards (SBSC) architecture by examining how they influence decision-makers when they attempt to achieve environmental goals of their organization through evaluation of environmental investment options. An experimental research model …

واقع الاستثمار الأجنبي المباشر في الاقتصاد الليبي, Ambia Oyadat

Al Jinan الجنان

No abstract provided.

إستثمار أوقاف الجمعيات الخيرية الإسلامية أحكام وضوابط, Mohammad Alothman

Al Jinan الجنان

No abstract provided.