Corporate Finance Commons^™

Essays On Moral Hazard, Bank Size, Influence, And Risk At The Federal Home Loan Banks, James Cash Acrey

Graduate Theses and Dissertations

Two chapters of research on the Federal Home Loan Bank advances, bank risk, and influence are presented. Federal Home Loan Bank (FHLB) advances are a growing source of debt financing for US banks. FHLB advances are not priced according to bank credit risk, creating potential for moral hazard. FHLB advances are positively related to contemporary bank risk, but the relation between prior advances and subsequent risk varies between large vs. small banks depending upon the risk measure used. The relation between FHLB advances and various measures of bank risk varies between pre-crisis (2005-07), crisis (2008-09), and post-crisis (2010-12) periods differently …

Empirical Studies On Interest Rate Derivatives, Xudong Sun

UNLV Theses, Dissertations, Professional Papers, and Capstones

Interest rate models are the building blocks of financial market and the interest rate derivatives market is the largest derivatives market in the world. In this dissertation, we shall focus on numerical pricing of interest rate derivatives, estimating model parameters by Kalman filter, and studying various models empirically. We shall propose a front-fixing finite element method to price the American put option under the quadratic term structure framework and compare it with a trinomial tree method and common finite element method. Numerical test results show the superiority of our front-fixing finite element method in the aspects of computing the option …

Ceo Optimism And Incentive Compensation, Clemens A. Otto

Research Collection Lee Kong Chian School Of Business

I study the effect of chief executive officer (CEO) optimism on CEO compensation. Usingdata on compensation in US firms, I provide evidence that CEOs whose option exercisebehavior and earnings forecasts are indicative of optimistic beliefs receive smaller stockoption grants, fewer bonus payments, and less total compensation than their peers. Thesefindings add to our understanding of the interplay between managerial biases andremuneration and show how sophisticated principals can take advantage of optimisticagents by appropriately adjusting their compensation contracts.

The Nature Of Lessons Learned From Argentina’S 2001 Financial Crisis, Emma Van Wagenberg

Renée Crown University Honors Thesis Projects - All

This paper makes the argument that though Argentina’s 2001 financial crisis was influenced by several factors, it is the 1991 Convertibility Plan that most strongly pushed the nation to the point of needing outside financial assistance. Its implementation led to and worked in combination with a multitude of unexpected factors. Together, these created economic conditions that chipped away at the stability of Argentina’s economy.

Given the nature of this project, information was gathered solely through research in texts published by both supporters and critics of organizations like the International Monetary Fund. In my readings, I found that there is generally …

Lattice Methods For The Valuation Of Options With Regime Switching, Atul Sancheti

UNLV Theses, Dissertations, Professional Papers, and Capstones

In this thesis, we have developed two numerical methods for evaluating option prices under the regime switching model of stock price processes: the Finite Difference lattice method and the Monte Carlo lattice method.

The Finite Difference lattice method is based on the explicit finite difference scheme for parabolic problems. The Monte Carlo lattice method is based on the simulation of the Markov chain. The advantage of these methods is their flexibility to compute the option prices for any given stock price at any given time. Numerical examples are presented to examine these methods. It has been shown that the proposed …

Wealth Management In Singapore, Francis Koh

Research Collection Lee Kong Chian School Of Business

As early as 2015, Singapore may oust Switzerland as the world’s top finance hub. But the path forward requires adjustments in the strategic direction of individual firms. Wealth management in Singapore is vibrant, growing, challenging.

Words Worth Price And Value, Tom Dunne

Articles

TOM DUNNE explains the terms used in relation to the valuation of property, and the need for common understanding among all parties using those terms. -

The Deadweight Loss Of Equity-Based Compensation, Jessica Pence

CMC Senior Theses

In order to maximize shareholder value, firms attempt to align the incentives of the executives with those of the shareholders by giving them equity as a portion of their compensation package. The terms associated with this equity compensation forces the executives to hold undiversified portfolios, resulting in a sizeable deadweight loss. This paper uses the formula developed by Meulbroek (2001)1 to calculate the dollar value of this deadweight loss, in order to quantify the costs associated with equity-based compensation. We find that the 56 executives in our data set have a combined deadweight loss of $70 billion, and that on …

Mergers & Abenomics: The Determinants Of M&A In Japan's New Economy, Ethan S. Hallberg

CMC Senior Theses

This paper investigates the influence of various macroeconomic variables on Japan’s merger and acquisition (M&A) activity, both in terms of total deal value and total number of deals. Looking at monthly data from June 1997 to December 2013, I use econometric time-series analysis to find that: First, total deal value per month is not well explained by our macroeconomic variables, but about half of the variation in number of deals per month can be explained by our dataset. Second, the most important determinant in the total number of deals per month during our period is the level of national debt, …

Private Debt Syndicates: Governance, Networks, And Syndicate Structure, William R. Mccumber

Graduate Theses and Dissertations

I examine the primary market for syndicated private credit agreements to U.S. firms within the context of contract theory with information asymmetries between contracting parties in a repeated game. Specific governance mechanisms determine a firm's cost of borrowing in syndicated credit agreements. Firms with governance mitigating agency risk between stakeholders, i.e. independent boards, strong shareholder monitoring, and greater CEO pay-performance sensitivity, enjoy lower borrowing costs. The interests of creditors and shareholders diverge with regard to external governance. Lenders charge higher spreads to firms at greater risk of acquisition and reward stronger firms with price concessions when they possess staunch anti-takeover …

Assessing Revenue Managers' Level Of Trust In Information Systems: An Exploratory Study Of Las Vegas Casino Resorts, Landon Taylor Shores

UNLV Theses, Dissertations, Professional Papers, and Capstones

This study examined revenue managers' level of trust in their revenue management system (RMS) at Las Vegas casino resorts. The study utilized an e-mail interview to measure revenue managers' attitudes about their RMS's degree of reliability and dependability, the degree to which they trust their RMS's pricing recommendations, and if a revenue manager's level of trust in technology had any effect on their likelihood of trusting their RMS.

The study invited 11 property and corporate revenue managers from Las Vegas casino resorts to participate in an e-mail interview, with nine revenue managers agreeing to participate. The main findings of the …

Relationship Between Interest Rate And Bank Common Stock Return: Evidence From The Top 10 United States Banks And Financial Sector Index, Hieu Trung Tran

Honors Projects in Finance

This research paper investigates the effect of changes in long-term interest rates on the returns of the top 10 US banks included in the Financial Sector Index. There are three main parts of this paper.

The first part uses the Augmented Dickey-Fuller (ADF) test to test the “Random Walk” of banks’ common stock returns. Based on the test’s results, returns of banks’ common stock do not solely follow the “Random Walk”.

In the second part, the Two-Factor Arbitrage Pricing Theory is employed to test the effect of changes in long-term interest rate on the return of banks’ common stocks. The …

Can Us Economic Variables Predict Chinese Stock Market?, Jeremy Goh, Fuwei Jiang, Jun Tu, Yuchen Wang

Research Collection Lee Kong Chian School Of Business

In the last few decades, we observed a significant increase in global economic activities and these activities may have an impact on both China's economy and stock market. Given the potential impact, we empirically examine whether US economic variables are leading indicators of the Chinese stock market. Prior to China joining the World Trade Organization (WTO) in the end of 2001, we find no statistical relationship between US economic variables and the Chinese stock market returns. However, we find US economic variables have statistically significant predictive power for periods after China's admission into the WTO. In addition, we show that …

Capitalization Structure: The Effects Of Leverage On Growth Prospects, Laura Cawley, Roers Janku

Renée Crown University Honors Thesis Projects - All

In this paper we quantitatively analyzed capital structure to lead to an understanding of the effects of debt within capital structure. Utilizing EBITDA growth as a proxy for the effects of leverage, we quantitatively analyzed the impact of the capitalization decision. Through the use of a model we analyzed 180 companies to come to conclusions about the EBITDA growth rate necessary as determined by leverage.

Out Of Sight, Out Of Mind: The Value Of Political Connections In Social Networks, Quoc-Anh Do, Yen Teik Lee, Bang Dang Nguyen, Kieu-Trang Nguyen

Research Collection School Of Economics

This paper investigates the impact of social-network based political connections on firm value. We focus on the networks of university classmates and alumni among directors of U.S. public firms and congressmen. Comparing firms connected to elected versus defeated politicians in the Regression Discontinuity Design of close elections from 2000 to 2008, we provide evidence that political connections enhance firm value. However, the value of political connections varies in a more complex way than expected. While connections to powerful members of the Senate generate strong positive impact on firm value, connections to newly elected congressmen are less valuable to firms than …

Finding Profitability Of Technical Trading Rules In Emerging Market Exchange Traded Funds, Austin P. Hallett

CMC Senior Theses

This thesis further investigates the effectiveness of 15 variable moving average strategies that mimic the trading rules used in the study by Brock, Lakonishok, and LeBaron (1992). Instead of applying these strategies to developed markets, unique characteristics of emerging markets offer opportunity to investors that warrant further research. Before transaction costs, all 15 variable moving average strategies outperform the naïve benchmark strategy of buying and holding different emerging market ETF's over the volatile period of 858 trading days. However, the variable moving averages perform poorly in the "bubble" market cycle. In fact, sell signals become more unprofitable than buy signals …

The Role Of Economic Community Of West African States (Ecowas) In Promoting Borderless Trade In West Africa., Adam J. Akperan, Sanni Ganiyu Kayode

Bullion

The Economic Community of West African States (ECOWAS) is a regional group of fifteen countries, founded in 1975. Its mission is to promote economic integration in "all fields of economic activities, particularly industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial questions, social and cultural matters". This paper examines the role of CBN economy and monetary policies on the heels of borderless trade amongst the ECOWAS State. ECOWAS aims to promote peace, co-operation and integration in economic, social and cultural activity, ultimately leading to the establishment of an economic and monetary union through the total integration of the …

Independent Financial Adviser : Key Factors For Engagement In Malaysia., Wan Azrul Wan Zainal Abidin

Student Works (2010-2019)

This study aims to investigate the key factors for engagement of the Independent Financial Adviser (IFA) in Malaysia. The objective of this study is to identify the key factor for the Malaysian public to engage the service of an IFA and their preference for the delivery of service by the IFA. This is in accordance to the initiative of the Malaysian Financial Sector Master Plan (FSMP) introduced in 2001. The finding of this research is important to the Malaysian consumer and the IFA since they would be able to mutually benefit from the understanding of how each fits into the …

Rebuilding Confidence In Nigerian Banks: The Challenge Of Good Corporate Governance And Professionalism., Uju M. Ogubunka

Bullion

The Nigerian Banking industry which is still evolving, has great potentials for positively impacting on the developing economy with over a hundred and forty million (140 million) people. Without a doubt, the industry has made noticeable progress and positive impact since its birth in the early 1890s, it would have achieved more had it not been bedevilled by occasional crisis. incidences of bank crisis in Nigeria, like in other jurisdictions, had led to bank shake-ups, failures and subsequent liquidations. Those outcomes gave rise to serious erosion of stakeholders' confidence in banking institutions and the system with far-reaching negative consequences for …

Firm Value And The Tax Benefits Of Debt : A Study On Public Listed Company In Malaysia., Izam Syaharadzi Ahmad Sofian

Student Works (2010-2019)

This study has three main objectives. First, to empirically defines the relationship between firm value and debt of Public Listed Company in Malaysia once endogeneity of contemporaneous debt is corrected. Secondly the study looks into the possibility impact of alternative theories such as Free Cash Flow and Debt Signaling Hypotheses to the relationship between firm value and debt. Finally, it examines the influence of managerial ownership towards firm value and how it affects the benefits of debts. This study uses interest expense scaled by total assets as proxy of debt. The relationship between firm value and debt is statistically tested …

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 …

The Financial Crisis And Global Supply Chains, Robert Mefford

Finance

The financial crisis which erupted in 2007 has already had profound effects on the global supply chains of multinational firms and will likely permanently alter some fundamental supply relationships. This essay explores what some of the consequences have been to date and speculates about future effects. Of course, the length, scope, and severity of the financial and economic crisis will determine how significant and permanent these impacts are, and it is impossible at this point in time to forecast this accurately. But in any case there have already been major developments in global supply chains that are likely to persist …

Do Analysts Influence Corporate Financing And Investment?, John A. Doukas, Chansog (Francis) Kim, Christos Pantzalis

Finance Faculty Publications

We examine whether abnormal analyst coverage influences the external financing and investment decisions of the firm. Controlling for self-selection bias in analysts' excessive coverage, we find that firms with high (low) analyst coverage consistently engage in higher (lower) external financing than do their industry peers of similar size. Our evidence also demonstrates that firms with excessive analyst coverage overinvest and realize lower future returns than do firms with low analyst coverage. Our findings are consistent with the hypothesis that analysts favor the coverage of firms that have the potential to engage in profitable investment-banking business.

Semi-Strong Form Market Hypothesis: Evidence From Cnbc's Jim Cramer's Mad Money Stock Recommendations, Elizabeth Dodson

Inquiry: The University of Arkansas Undergraduate Research Journal

Mad Money has become one of the most popular shows on CNBC. The host, Jim Cramer, has an outlandish style and personality that viewers find intoxicating. Cramer's goal for the show is to make people money. Does he succeed? This paper finds that investors can expect to gain above-average, risk adjusted returns by following Cramer's stock recommendations and trading accordingly. These findings challenge the semi-strong form market hypothesis. According to this hypothesis investors should not recognize gains trading on public information since it states that the market has already adjusted prices for that information. It also contributes to current literature …

Financing Strategies Of The R & D Firm, Lawrence Fogelberg, John M, Griffith

Finance Faculty Publications

This paper investigates the financing strategies of the R&D firm. Our hypotheses are based on Cho's (1992) game theory model where the firm develops a product but needs additional financing to bring it to market. The model generates a particularly rich set of hypotheses: 1) to fund the completion of its project and bring its product to market, the firm initiates negotiations with an established firm; 2) the majority of the acquisitions will be partial cash acquisitions through private secondary offerings. Confirming the model's hypotheses, we find that the majority of the acquisitions are partial cash acquisitions by significantly larger …

Employment Generation And Opportunities In The Manufacturing Sub-Sector. The Case For The Manufacturing Of Farm Implements., Ihinodu I. I

Bullion

The modernization of agriculture has the potential to achieve the various objectives of creating employment, increasing productivity and output in both the sector and the entire economy, thus contributing to the food security goal of the government. This paper aims primarily at examining the prospects as well as the processes of manufacturing agricultural implements with a view to encouraging small/medium entrepreneurs to engage in the ventures. It examines the manufacturing activities of farm implements. It analyses the role which governments should play as well as highlighting the potential benefits of the enterprises. The paper conclude that given the stage of …

Employment Creation And Opportunities In The Manufacturing Sub-Sector: The Case For The Manufacturing Of Cotton, Textile In Nigeria., Onuoha G. Nkem

Bullion

Nigeria is the third largest producer of cotton in Africa after Egypt and Sudan. Cotton growing zones are mainly in the Northern parts of the country, though the planting of cotton started in Western Nigeria. This paper focusses on the manufacture of cotton, textile in Nigeria, sources of material available, the equipment required, manpower, the land space required, the capital outlay and Profitability of the business. The paper concludes that from the financial result of the above analysis, the project is economically viable and technically feasible. Neem Seeds as Raw Materials is in abundance and can be sourced at lower …

Review And Appraisal Of 2003 Budget And Economic Performance., Ige S. Cyril

Bullion

The first set of problems in realizing the benefits of a national budget in Nigeria, the 2003 Federal Government Budget in particular, is the delay in formulation and presentation to the National Assembly. This paper examines various definitions of the national budget as understood by some of the important stakeholder. It discusses budget implementation and management, budget 2003 and the people, strengthening programming as a basis of budgeting for development, and co-ordination of economic management in 2003. Finally, the study concludes that NEEDS is a welcome idea but its goals will prove difficult to achieve because of the flaw in …

Fiscal Policy Thrust Of The 2004 Budget., Odoko F. O

Bullion

The budget is an important tool of economic management. Usually, it presents estimates of Government revenue and expenditure for a fiscal year. The objective of this paper is to provide an overview of the fiscal policy measures in the 2004 Budget. This paper contains the background to the budget, the policy thrust and the key parameters. It highlights the revenue and expenditure estimates and identifies the policy priorities and prospects. Finally, a good monetary policy is expected to achieve macro economic stability and a sound financial sector if effectively implemented and barring fiscal shocks. Overall, socio-political stability and fiscal discipline …

Monetary And Other Financial Sector Policy Measures In 2004., Nnanna O. J

Bullion

The objective of this paper is to review the monetary and other financial sector policy measures in 2004, with a view to identifying how they assist in achieving the macroeconomic objectives of the government in fiscal 2004. This paper evaluates the financial sector and the macroeconomic developments during fiscal 2003. It examines the monetary and other financial sector policies in 2004. A good monetary policy is expected to achieve macro economic stability and a sound financial sector if effectively implemented and barring fiscal shocks. Overall, socio-political stability and fiscal discipline are critical factors for the effectiveness of monetary policy. The …