Finance and Financial Management Commons^™

Economic Conundrums In Search Of A Solution: The Functions Of Third-Party Litigation Finance, Joanna M. Shepherd, Judd E. Stone Ii

Faculty Articles

Despite a rapid increase in economic significance and substantial increase in international use, third-party litigation financing remains poorly understood. No academic consensus takes account of the multiple economic conundrums that third-party litigation financing arises to solve, nor do legal scholars adequately consider obvious public and private substitutes for litigation financing that society rightfully recognizes as innocuous or outright beneficial. In this Article, we explore the economic challenges driving both business plaintiffs and sophisticated law firms to seek external litigation financing. We examine closely the key elements of the litigation financing arrangement itself, focusing on eligible cases and clients, devices financiers …

Political Risk And The Cost Of Capital In Asia-Pacific Property Markets, George D. Cashman, David M. Harrison, Hainan Sheng

Finance Faculty Research and Publications

This study investigates the impact of political risk on the cost of capital for publicly traded real estate firms. More specifically, by using a sample of 102 REITs and listed property trusts, which hold nearly 6,000 distinct investment properties across the Asia-Pacific region, we find strong empirical evidence that increased exposure to political risk increases both the cost of equity financing of a firm and its weighted average cost of capital. Interestingly, no such linkages are apparent between political risk and the cost of debt of a firm. These empirical results are robust to a variety of alternative measures of …

Three Essays On Compensation And The Board Of Directors, Ian Cherry

Electronic Theses and Dissertations

In my first essay, I find a statistically and economically significant director-specific component in CEO pay following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). In the cross-section of firms, directors that award relatively higher (lower) CEO pay in one firm also award relatively higher (lower) CEO pay in other firms of whose boards they are members during the year. Based on my estimates, the director-specific component is responsible for around ±3.5% of total CEO pay or around ±$230,000 per CEO-year on average. In addition to affecting CEO pay levels, the director-specific component also has a significant effect on …

Strategically Camouflaged Corporate Governance In Ipos: Entrepreneurial Masking And Impression Management, David F. Benson, James C. Brau, James Cicon, Stephen P. Ferris

Faculty Publications

Entrepreneurs attempt to persuade potential investors that their new ventures are both credible andworthy of funding. A long line of research on entrepreneurial impressionmanagement establishes that the ability to present their ventures in a favorable light is a key attribute of successful entrepreneurs. In this study, we examine the opposite side of the issue and test to determine if some entrepreneurs obscure corporate governance information.We create a newmetric tomeasure the level of camouflage used in governance documents for initial public offerings (IPOs). We find that entrepreneurs are less likely to use camouflage during periods of high scrutiny, as measured by …

Why Cash Flow Is More Important Than Profit, Aretha Boex

White Papers

While profits are good, they do not adequately represent the financial standing of a firm. It is quite possible for a company to report profits but be unable to grow, secure financing or attract investors.

Why Good Financial Records Are Worth The Effort, Sara Bennett

White Papers

Accounting. Taxes. Payroll. Recordkeeping. Necessary, but confusing at times. Thorough and accurate recordkeeping of all revenues and expenses related to your business is essential and goes beyond financial and tax reporting. Why you should seek help from the pros

Success Factors Of Small Business Owners Of Independent Financial Planning Firms, Joanne Snider

Walden Dissertations and Doctoral Studies

Small Business Administration statistics indicate that 20% of small businesses fail within the first 2 years and 50% fail within 5 years. The purpose of this case study was to explore the success factors and strategies of 12 small business owners of independent financial planning firms who achieved profitability beyond 5 years. A gap exists in the literature concerning such business owners, and their experiences provide valuable information to others desiring to start or maintain a financial planning business. The conceptual framework was entrepreneurship theory and Porter's 5 forces model of competitive strategy. The data were gathered via semistructured interviews …

Retail Distribution Within The New York City Organic Cacao Market, Omari Nekoro Williams

Walden Dissertations and Doctoral Studies

The purpose of this multiple case study was to explore strategies small physical commodities firm owners need to establish a distribution channel within the commodities market to enhance profits. The general business problem was that importing physical commodities from emerging markets was not profitable. The specific business problem was some small physical wholesale commodities firm managers lacked strategies to establish distribution channels for imported commodities. The information presented in this study is important to suppliers, manufacturers, distributors, and retailers of organic cacao products to identify strategies to enhance their distribution channels. Disruptive innovation and the theory of constraints grounded the …

One-Step Bond Pricing, Tom Arnold

Finance Faculty Publications

This paper re-works the traditional formula for pricing a bond with a present value annuity and a single discounted cash flow into a "one-step' bond pricing formula. The new derivation allows for a clear presentation of the relationship between a bond's coupon yield and its yield to maturity and a quick means for pricing a bond.

Crummer Suntrust Portfolio Recommendations: Crummer Investment Management [2015], Heather Cunningham, Jeffrey Dirkin, Seonag Doherty, Will Edwards, Christian Fielitz, Alison Frederick, Kathryn Joseph, Marten Mueller, Hongda Qiao, Tomas Cabrera Ranaldi

Crummer Truist Portfolios

We approach the market this year with muffled optimism. The market’s growth rate will be softer than the last two years, based on our GDP forecast of 2.8% accompanied by steady unemployment and low interest rates. In this environment, stock selection is paramount and we have modified the portfolio to favor pro-cyclical sectors like Consume Discretionary and Industrials.

Two Essays On Institutional Investors And U.S. Bank Holding Companies, Hui Wang

LSU Doctoral Dissertations

This dissertation studies institutional investment in U.S. bank holding companies (BHCs). The first essay examines institutional investing preferences in U.S. banks and the impact of expansion of bank power on the preferences. Institutional investors prefer BHCs that hold more liquid assets, are better capitalized and larger in size, have better loan quality, lower stock return volatility and less derivative trading. In addition, the expansion of bank power is welcomed by various types of institutional investors, except for long-term institutions. Institutional investors also become less risk-averse when investing in BHCs that have expanded into non-banking business. However, the increased complexity and …

Essays On Mortgage Debt Payment, Meagan Nicole Mccollum

LSU Doctoral Dissertations

In this dissertation, I offer three independent studies that each contribute to the literature on mortgage debt payment. In the first paper, I examine the recent phenomenon of mortgage curtailment (borrowers making voluntary partial prepayments) and link this behavior to consumer deleveraging trends. In the second paper, I use the curtailment measures developed in the first essay to examine heterogeneity in sensitivity to current mortgage leverage in default decisions. Considering the group of borrowers who have previously curtailed mortgage debt, I posit such borrowers should be less sensitive to current leverage than borrowers without past curtailments because previous curtailers have …

Essay On Anti-Takeover Provisions And Corporate Spin-Offs, Wei Du

LSU Doctoral Dissertations

Despite the prevalent use of anti-takeover provisions (ATPs) based indices as measures of corporate governance quality, the role of ATPs (efficiency vs. entrenchment hypotheses), and their relationship to firm performance are not fully understood. Corporate spin-offs offer a unique opportunity to disentangle entrenchment motives from efficiency motives behind the adoption of ATPs. This setting also provides relatively clean inferences on the relation between ATPs and firm performance. This paper studies the design of ATPs in spun-off firms relative to their parents, the determinants of ATPs, and their relationship to subsequent firm performance. We show that spun-off firms typically are endowed …

Does Microfinance Fill The Funding Gap For Microentrepreneurs? A Conceptual Analysis Of Entrepreneurship Seeding In Impoverished Nations, James C. Brau, Sunshine N. Cardell, Warner P. Woodworth

Faculty Publications

We address the role microfinance institutions (MFIs) play in funding entrepreneurial ventures and present a distinction between the types of entrepreneurs that seek MFI and traditional venture funding. We argue that microfinance can serve successfully as s eed financing for microentrepreneurs in under developed economies around the world. By comparing bootstrapping and private equity seed financing in developed economies to microfinance seed financing in impoverished economies, we show that the different ent repreneurial characteristics in the two economies have similar funding gaps but are solved with different sources of funding.

The Effect Of Ceo Gender, Age, And Salary On Firm Value, Brandon H. D'Ewart

CMC Senior Theses

This paper investigates the academic conclusions on how CEO gender and salary affect firm value, while at the same time adding data on how CEO age affects firm value. Via an event study of S&P 500 CEO changes from 2000 to 2006 I confirm the current academic findings and discover that CEOs promoted during their 40s negatively influence firm value, while CEOs in older age brackets show a positive abnormal return on firm value. With this validation and addition to the existing data, firms and investors can more effectively assess proper candidates for the position of CEO and allocate resources …

The Power Of An Actively Managed Portfolio: An Empirical Example Using The Treynor-Black Model, Alexander D. Brown

Honors Theses

The focus of this thesis is to examine the added benefits of actively managing a portfolio of securities from an individual investor's perspective. More specifically, managing a market portfolio with the combination of a selected few actively managed securities can, in some instances, create excess return. The active portfolios are formed based on the firms' specific industries or region in which they operate. The idea is that an investor can forecast that a specific industry will outperform or underperform other industries during different periods in the market. Using the investor's forecasts can provide excess returns if the forecast is accurate. …

The Impact Of Monetary Policy On The Stock Market, Simin Hojat

Walden Dissertations and Doctoral Studies

Prior studies examining the impact of monetary policy instruments on the equity market have produced mixed results. This problem is important to address because of the substantial impact of monetary policy on the economy and economic resource allocation via the equity market. The purpose of this study was to determine the impact of change in money supply (M2), change in Federal Funds Rate (FFR), and change in Federal Funds Futures (FFF) on the expected rate of returns of publicly traded companies while controlling for the rate of return of the whole equity market and size of the sampled companies. The …

Three Essays On Default Risk In Capital Markets, Laleh Samarbakhsh

Theses and Dissertations (Comprehensive)

This dissertation comprises three essays on default risk in capital markets exploring (a) failure risk of hedge funds, (b) pricing in equity option markets, and (c) relationship between option and credit default swap markets, respectively, with a particular focus on the recent financial crisis.

The first essay “The role of Excess Leverage in Hedge Funds Failure” investigates the role of financial leverage, including the use of margins and derivatives, in the hedge funds failure during the 2008 financial crisis. Motivated by failure of the two Bear Sterns hedge funds, this paper examines why some hedge funds failed during and after …

Effects Of Investor Sentiment Using Social Media On Corporate Financial Distress, Tarek Hoteit

Walden Dissertations and Doctoral Studies

The mainstream quantitative models in the finance literature have been ineffective in detecting possible bankruptcies during the 2007 to 2009 financial crisis. Coinciding with the same period, various researchers suggested that sentiments in social media can predict future events. The purpose of the study was to examine the relationship between investor sentiment within the social media and the financial distress of firms Grounded on the social amplification of risk framework that shows the media as an amplified channel for risk events, the central hypothesis of the study was that investor sentiments in the social media could predict t he level …

Dynamically Hedging Oil And Currency Futures Using Receding Horizontal Control And Stochastic Programming, Paul Edward Cottrell

Walden Dissertations and Doctoral Studies

There is a lack of research in the area of hedging future contracts, especially in illiquid or very volatile market conditions. It is important to understand the volatility of the oil and currency markets because reduced fluctuations in these markets could lead to better hedging performance. This study compared different hedging methods by using a hedging error metric, supplementing the Receding Horizontal Control and Stochastic Programming (RHCSP) method by utilizing the London Interbank Offered Rate with the Levy process. The RHCSP hedging method was investigated to determine if improved hedging error was accomplished compared to the Black-Scholes, Leland, and Whalley …