Corporate Finance Commons^™

Bric Ipos: How Do Capital Market And Economic Activities In Emerging Markets Relate?

Fordham Business Student Research Journal

Since the beginning of the millennium, the acronym BRIC has captivated the world and become synonymous with an extraordinary economic growth story that has defined the first decade of the 21st century. Along with newfound prosperity, entrepreneurs in the BRIC countries (Brazil, Russia, India and China) have been opening themselves up to further growth opportunities for investors all over the world through equity financing by issuing IPOs. This paper primarily attempts to explore the relationship between the capital market activities of the BRIC countries and their corresponding economic indicators. In the past decade, IPO activity has witnessed a rapid increase …

Integrating A New Business Into The Financial Planning Process, Barbara M. Tarasovich

WCBT Faculty Publications

A new Controller in this case was recently hired by Unilever, a global 200 consumer products organization, to integrate a newly acquired business into Unilever’s financial planning process. The newly acquired organization was a publically held company and had its own existing financial processes and procedures. Financial planning and reporting are major company activities and finance and accounting professionals are expected to “get it right.” The purpose of this case study is to get students to think about the difficulties and challenges of revamping existing financial processes and procedures and alert them to areas where other financial professionals have encountered …

F.A.C.E.S. (Faculty Academic Community Education Showcase): Professional Growth Experiences In A Career University, Paul J. Colbert, Ph.D.

MBA Faculty Conference Papers & Journal Articles

Institutes of higher education exist for the purpose of developing, fostering, nurturing, and stimulating the intellectual growth and development of students. The core values of a college education provide students conceptual and practical educational opportunities that focus on improving their skills and knowledge. These skills and knowledge translate into purposeful, real-life learning experiences. However, in the academic community, learning is not restricted to students. Faculty, too, must be supported and provided opportunities for personal and professional growth and development. Although professional development is not a novel concept in the education profession, schools often take up the gauntlet, but fall short …

Financial Stability And Casino Debt, David G. Schwartz, Eugene M. Christiansen

Library Faculty Research

Casino operators have always borrowed money to construct and improve their resorts. Beginning in 1999, however, the Las Vegas-based companies that dominate gambling in Nevada and many other jurisdictions began taking on unprecedented levels of debt. This debt load escalated from 2005 to 2009, and, though it has since leveled off, it has left casino operators more highly leveraged than ever before. Companies with such high levels of debt have consequently high interest payments, which leads to less money available for capital investment; it also makes them susceptible to default, should revenues weaken (as casino revenues did from 2008 onward). …

Paying The Irs Whistleblower: A Critical Analysis Of Collected Proceeds, Karie Davis-Nozemack, Sarah J. Webber

Accounting Faculty Publications

Congressional changes to the IRS Whistleblower Program were intended to induce more participation in the program by allowing larger incentives and greater certainty that whistleblowers would be paid. Since the Program was amended, tax whistleblower tips have increased 76 percent1 and revenue collected due to whistleblowers has increased 79 percent.2 Despite a rise in tips and revenue collected, whistleblower payments have not increased. In fact, the number of tax whistleblower awards paid has decreased 44 percent.3 We hypothesize that this trend is due to the administration of the program but also to the interpretation of “collected proceeds.” Collected proceeds are …

Redefining Globalization, Aqueil Ahmad

Walden Faculty and Staff Publications

This article highlights some facts and fallacies about globalization, with a particular reference to the global economy. To explain what is globalization and what it is not is critical both theoretically and practically for nations, corporations, and communities to benefit from it and avoid its negative consequences. Some historical antecedents of globalization and the interactive nature of its structures and processes are highlighted in this article. The analysis is expected to benefit scholars, practitioners, and agents of social change interested and involved directly or indirectly in the impacts and processes of globalization.

Creditor Rights And R&D Expenditures, Bruce Seifert, Halit Gonenc

Finance Faculty Publications

Manuscript Type: Empirical

Research Question?Issue: This study examines the impact of creditor rights on R&D intensity (R&D/total assets). We argue that managers in countries with strong creditor rights have more incentives to reduce cash flow risk and therefore limit expenditures on R&D more than managers located in countries with weak creditor rights.

Research Findings/Insights: Using a sample of over 21,000 firms from 41 countries, our research is one of the first to document that strong creditor rights are indeed associated with reduced R&D intensity. This negative relationship is observed in market‐based countries, but not in bank‐based countries. Moreover, the results …

Fund-Management Gender Composition: The Impact On Risk And Performance Of Mutual Funds And Hedge Funds, Angela Luongo

Fordham Business Student Research Journal

This paper examines gender differences in fund managers’ risk tolerance and performance. We explore these differences in both the universe of U.S. mutual funds and hedge funds using risk and performance metrics that cover one-year, three-year, and five-year horizons. We find that funds managed by women outperform those managed by men with less risky portfolios. The outperformance persists after adjusting for risk. Overall, the results indicate that female fund managers are severely underrepresented despite their quality performance. A workgroup comprised more equally of male and female managers is likely to lead to greater stability in the financial markets due to …

The Corporate Ethics Audit: To Prevent And Detect Management Fraud, Internal Auditors Must Have A Sound Understanding Of Human Behavior, Sridhar Ramamoorti, R. Luke Evans

Accounting Faculty Publications

In theory, management is responsible not only for designing and implementing strong systems of internal control but also confirming their continued effectiveness over time through monitoring activities. Yet, management override of these monitoring activities — -Soften described as the Achilles' heel of internal controls — is a growing trend at the executive level, as indicated by both of The Committee of Sponsoring Organizations of the Treadway Commission's fraud studies of 1998 and 2010. When the “overseer” becomes the perpetrator of fraud, how do shareholders protect themselves? Indeed, as the Roman satiric poet Decimus Juvenal wrote, “But who will guard the …

Don’T Burst The Bubble: An Analysis Of The First-Time Homebuyer Credit And Its Use As An Economic Policy Tool, Sarah J. Webber

Accounting Faculty Publications

In 2008, faced with a looming real estate crisis, Congress hastily acted to stabilize the economy by offering a first-time homebuyer credit. This tax credit was trumpeted as a solution to the excess inventory of homes for sale and to stop the free-fall in home values. The credit, however, failed to deliver on its promises. By analyzing the first-time homebuyer credit, its creation, its implementation and its economic impact, this Article concludes that, when compared to alternative policy solutions, Congress erred in using the tax code to implement a first-time homebuyer credit.

Corporate Parents, Initial Legitimacy, And Resource Acquisition In Small And Medium Firms: An Empirical Examination, Gregory Murphy, Neil M. Tocher

New England Journal of Entrepreneurship

Small and medium enterprises (SMEs) commonly struggle to acquire needed financial, human, and technological resources. The above being stated, recent scholarly research argues that SMEs that are able to successfully navigate the legitimacy threshold are better able to gather the resources they need to survive and grow. This article provides an empirical test of that claim by examining whether the presence of a corporate parent positively influences SME resource acquisition. Results of the study show that SMEs with corporate parents, when compared to like-sized independent SMEs, have higher credit scores, have more complete management teams, use more computers, and are …

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.

Determinants Of Corporate Cash Holdings, Yun Lai (William) Li

CMC Senior Theses

The paper explores the driving forces behind corporate cash holdings by analyzing past literature and extending this research to the behavior of firms after the 2008 recession. I look at the cash to assets and net debt to assets ratios from October 1980 to October 2011 to obtain an understanding of the past and current state of cash holdings. A comprehensive literature review is done on agency costs and transactional motives to give the reader an overview of the costs and benefits of holding cash. This provides the foundation for the precautionary motives for companies today to keep cash as …

What Influences The Changes In Reit Ceo Compensation? Evidence From Panel Data, John M. Griffith, Mohammad Najand, H. Shelton Weeks

Finance Faculty Publications

This study examines what influences the changes in REIT CEO compensation using the following performance measures: average three-year total returns to shareholders, market value added, Tobin's q, and change in funds from operations. The impact of managerial power on the change in compensation is also examined. The empirical evidence indicates that firm performance and size do not influence the change in CEO salary, while risk, tenure, title, ownership, and age have significant impacts. Bonuses are not influenced by risk, size, or CEO power; however, they are influenced by performance. Option awards are affected by performance and CEO power.

The Abcs Of Communicating Results, Deborah S. Archambeault, Morgen Rose

Accounting Faculty Publications

Communicating results is an integral part of the internal auditor's job, and The IIA's International Standards for the Professional Practice of Internal Auditing recognizes its importance by specifying in Standard 2420 that communications should be "accurate, objective, clear, concise, constructive, complete, and timely." In its 2009 survey. The Biggest Internal Audit Challenges in the Next Five Years, Protiviti, a global consulting firm, ranked communication with management and the audit committee as one of the biggest challenges facing internal auditing through 2012. Their subsequent 2010 Internal Audit Capabilities and Needs Survey identified presentation skills as the top "need to improve" personal …

Developing A Culturally Responsive Classroom Collaborative Of Faculty, Students, And Institution, Paul J. Colbert

MBA Faculty Conference Papers & Journal Articles

Culture is integral to the learning process. It is the organization and way of life within the community of students and teachers and directs the way they communicate, interact, and approach teaching and learning. Although founded in particular values and principles, the academy, like most organizations, is impacted day-to-day by its culture. Yet, the traditional higher education institution has not been designed to operate within a racially or ethnically diverse student population. The social, political, economic, and cultural forces that support the institution influence the teaching and learning environments. To better address cultural diversity in the classroom, faculty must first …

Carrots And Sticks: By Auditing Executive Compensation And Benefits, Auditors Can Help Their Organization Move From Risk To Rewards Management, Sridhar Ramamoorti, Usha R. Balakrishnan

Accounting Faculty Publications

Although the focus of risk management traditionally has been on downside risk, the time is right to focus this dialogue on upside risk — the management of value-creation opportunities through "rewards management." After all, rewards such as bonuses and stock options are typically greater for those who identify and leverage new value-creation opportunities. For-profit organizations favor those individuals who are well-connected and leverage their relationships to bring in clients and attract customers. Their selling ability, revenue-generating strategies, and overall modus operandi quickly earn them the coveted title of "rainmakers."

Nevertheless, rewards and incentives can encourage undesirable behaviors. Executives quickly learn …

Maintaining A Flexible Payout Policy In A Mature Industry: The Case Of Crown Cork And Seal In The Connelly Era, James Ang, Tom Arnold, C. Mitchell Conover, Carol Lancaster

Finance Faculty Publications

As related in these pages, the history of Crown Cork and Seal (hereafter known as “Crown”) provides us with a case of a company that stopped paying dividends but establish a disciplined share repurchase policy and did so for all the right reasons. Under family ownership in the 1950s, Crown lost market share and was on the brink of bankruptcy when its largest shareholder, John Connelly, was elected chairman of the board in 1957. Under John Connelly’s leadership, the firm restructured its operations and began a payout policy based solely on stock repurchases. During the Connelly era, the firm did …

Target Status And Method Of Payment : A Perfomance Analysis Of Acquisitions In Malaysia., Lee Siew Peng

Student Works (2010-2019)

This study investigates firms performance in acquisition based on the target status and methods of payment in the Malaysian market over the period 2000-2004. To measure the acquiring and target firms abnormal returns around the acquisition announcements, the study employs the market model with Scholes-Williams adjustments for thin trading. For long-term analysis after acquisition, we use the market-adjusted model and buy-and-hold abnormal approach. The study finds that, in the short-term, acquisition activities create positive gain to both acquiring and target firms, most of which go to the target firms. Further, most of the abnormal returns occurs on day 0 and …

Maximized Monitoring, Constance M. Lehmann, Sridhar Ramamoorti, Marcia Weidenmier Watson

Accounting Faculty Publications

During the last few years, global financial companies and investment banks have taken billions of dollars in write-downs owing to exposure in the subprime lending market. Lack of risk function visibility, insufficient communication of risks to top management, and siloed risk approaches have been cited as reasons for these failures. New York University finance professor Nouriel Roubini, one of the few who predicted the crisis, famously observed at the World Economic Forum's 2009 Davos Summit that risk cannot be priced correctly "when the opacity and lack of transparency of financial firms and new instruments lead to unpriceable uncertainty rather than …

Corporate Governance, Ownership Structure And Intellectual Capital Disclosure : Evidence From Malaysia., Gan Kin

Student Works (2010-2019)

Since the Asian Financial crisis occurred in 1997, Malaysia has implemented important corporate governance reforms to identify and address weaknesses highlighted during the crisis. Malaysia is aggressively highlighting the importance of good corporate governance to maintain its competitive edge as well as a source for sustainable economic growth. Keenan and Aggestam (2001) stressed that the success and failure of organizations in the twenty-first century depends on good governance practices in creating and leveraging intellectual capital (IC). Further, Tayles et al., (2007) view that IC has attracted increasing interest in recent years as management recognizes the contribution it makes in their …

Trusts Versus Corporations: An Empirical Analysis Of Competing Organizational Forms, A. Joseph Warburton

College of Law - Faculty Scholarship

This paper studies the effects of organizational form on managerial behavior and firm performance, from an empirical perspective. Managers of trusts are subject to stricter fiduciary responsibilities than managers of corporations. This paper examines the ramifications empirically, by exploiting data generated by a change in British regulations in the 1990s that allowed mutual funds to organize as either a trust or a corporation. I find evidence that trust law is effective in curtailing opportunistic behavior, as trust managers charge significantly lower fees than their observationally equivalent corporate counterparts. Trust managers also incur lower risk. However, evidence suggests that trust managers …

Western Kentucky University Annual Report 2010: Bridging The Gap

SIFE (Students In Free Enterprise)

No abstract provided.

Intra-Industry Effects Of Takeovers: A Study Of The Operating Performance Of Rival Firms, Rupendra Paliwal

WCBT Faculty Publications

This paper investigates whether the managers of industry rivals act to mitigate their agency exposure and improve operating performance when one of the firms in the industry is subject to a takeover attempt. The results indicate that rival firms in general decrease free cashflows, improve operating performance, reduce capital expenditures, and increase leverage in response to a control threat within the industry. In particular, rival firms with potentially higher agency costs i.e., fewer investment opportunities and high cash or high free cashflows exhibit a higher reduction in cash levels and free cashflows subsequent to a control threat in their industry. …

The Determinants Of Trade Credit Extension And The Problem Of Late Payment In The Malaysian Manufacturing Sector., Teh Chee Ghee

Student Works (2010-2019)

This study investigates the determinants of trade credit extension and the association between late payment from trade debtors and profitability in the Malaysian manufacturing sector. It is based on exploratory data analysis and ordinary least squares (OLS) regressions on a crosssectional sample of 383 and 287 public-listed manufacturing companies, respectively, using audited financial statements for the financial year ending 2007/2008.Investment in accounts receivables is even higher than in inventories in the Malaysian manufacturing sector. Contrary to previous studies, this study finds that large companies,manufacturers with higher liquidity and with higher collateral assets extend less trade credit, indicating that the listed …

Bringing Freud To Fraud: Understanding The State-Of-Mind Of The C-Level Suite/White Collar Offender Through “A-B-C” Analysis, Sridhar Ramamoorti, Daven Morrison, Joseph W. Koletar

Accounting Faculty Publications

In this paper we use a primarily “behavioral lens” (cf. Ramamoorti, 2008; Ramamoorti & Olsen, 2007) to try to understand the state-of-mind and motivations of the C-level suite/white collar offender before, during, and after the perpetration of management fraud. We offer a useful conceptual approach called “A-B-C Analysis” to understand the incidence of fraud from individual and group perspectives, as well as more macro-oriented, cultural/contextual levels. It is our hypothesis that fraud occurs either because of an individual criminal’s calculated/intentional betrayal of trust, a duo or team of “bad boys” who push ethical envelopes, and/or an organizational/social/national culture of passivity, …

At A Crossroads: The Impact Of International Financial Reporting Standards In The U.S., Cindy K. Harris

Business and Economics Faculty Publications

Public companies in the United States face a new challenge. As set forth in its roadmap for implementation, the Securities and Exchange Commission (“SEC”) is considering the potential use of financial statements prepared in accordance with international financial reporting standards (“IFRS”.) The chief goal of these global standards is to establish a uniform system to improve comparability of companies’ financial positions. For decades, Generally Accepted Accounting Principles (“GAAP”) have been the framework of financial statement preparation for public companies in the U.S. The movement to IFRS represents an unprecedented change in the basis of financial reporting, since IFRS would supersede …

Is Something Missing From Your Company's Satisfaction Package?, Deborah S. Archambeault, Richard Burgess, Stan Davis

Accounting Faculty Publications

Conventional wisdom suggests that salary, benefits, and other monetary factors are important aspects of keeping employees satisfied. But which factors have the biggest impact on overall satisfaction? While companies focus on the monetary factors, there are other components of the overall “satisfaction package,” that are just as important, yet often overlooked.

It comes as no surprise that satisfied employees are important to the success of any organization. In short, higher satisfaction increases productivity, improves service levels, and positively impacts a company’s bottom line. While keeping employees satisfied should be an important goal for any organization, a recent job satisfaction survey …

Paul M. Klekner (B), Roger R. Schnorbus

Robins School of Business White Paper Series, 1980-2022

This is a fictitious case study, including the name of the restaurant and the people involved.

Paul Klekner graduated first in his class from the Culinary Institute of America (CIA) in 1998; his fellow students named him the chef most likely to succeed in the future. After graduation, he and his wife, Sarah, moved back to his home in Richmond, Virginia where he was employed as a chef at several restaurants including Bottega and Old Original Bookbinders. In 2003, he decided to open his own restaurant, Rogerios, in the Tobacco Row section of Richmond. With an inheritance of $300,000 he …

Pfizer, Inc., Nadezhda Smirnova

Honors College Theses

This paper addresses a few major problems that the pharmaceutical company Pfizer Inc. has recently been facing. The paper also provides promising solutions to these major problems, which without action can lead to the demise of the pharmaceutical giant. The implementation of the proposed solutions would allow Pfizer Inc. to improve its position and inevitably save it from possible demise.