Finance and Financial Management Commons^™

Basic Concepts In Forest Valuation And Investment Analysis: Edition 3.0, Steven H. Bullard, Thomas J. Straka

Faculty Publications

This book was originally intended to supplement lectures in forestry economics at the undergraduate level. It’s currently used for that purpose in ‘Forest Resource Economics’ courses at several universities. The book is also intended, however, to serve as a basic reference for foresters with experience in valuation and investment analysis concepts and methods. It has proven to be a valuable resource in forest valuation and investment analysis workshops for practicing foresters, landowners, and others interested in forestry investments.

Financial Literacy: What Are Business Schools Teaching?, Candy A. Bianco, Susan M. Bosco

Business Faculty Publications

The financial illiteracy of Americans has attracted the attention and funds of more than 10 federal agencies and countless other state agencies and non-profit organizations. The manifestations of poor financial skills and planning are divorce, depression, and many elderly Americans living in poverty.

Hundreds of business and non-business college students have been surveyed. Both groups were found to be financially illiterate. We examined the curricula of 100 AACSB institutions and concluded that business schools are either not offering fundamental courses in personal financial planning or that the courses are not generally available to business students (for credit) or non-business students. …

Essays On Reverse Leveraged Buy-Outs, Mark Richard Gruskin

Wayne State University Dissertations

ABSTRACT

ESSAYS ON REVERSE LEVERAGED BUYOUTS

by

MARK GRUSKIN

August 2011

Advisor: Dr. Sudip Datta

Major: Business Administration (Finance)

Degree: Doctor of Philosophy

This dissertation is the first study to investigate public-to-private reverse leveraged buyouts (RLBOs). The first essay measures changes in profitability, financial structure, operations, and cost structure to detect actions taken during the private period. Results show that approaching the leveraged buyout there is an above industry level of free cash flow and capital expenditures, while growth options are at competitive levels. These factors in the presence of low ownership concentration suggest the existence of overinvestment.

Increased leverage …

The Fed And The 2007-2009 Financial Crisis: Treating A Virus With Antibiotics? Evidence From The Commercial Paper Market, Mark D. Griffiths, Vladimir Kotomin, Drew B. Winters

Faculty Publications – Finance, Insurance, and Law

The two main explanations for the 2007-2009 financial crisis in the money markets are credit concerns and liquidity issues. These risks are intimately related, especially in the money markets, and either can lead to somewhat similar behavior by market participants. We study the U.S. commercial paper (CP) market to draw insights about the nature of the crisis which resulted in the amount of outstanding CP shrinking from the peak of $2.18 trillion in early August 2007 to $1.27 trillion in early July 2009. However, the CP market is not homogeneous in terms of credit quality, maturities and types of issues …

A Web Application For Financial Trading Simulation, Li-Chiou Chen, Lixin Tao, Padma Kadiyala

Cornerstone 3 Reports : Interdisciplinary Informatics

No abstract provided.

A Test Of The Expectations Hypothesis In Very Short-Term International Rates In The Presence Of Preferred Habitat For Liquidity, Vladimir Kotomin

Faculty Publications – Finance, Insurance, and Law

This study incorporates year-end and quarter-end preferences for liquidity and other calendar-time effects into the test of the expectations hypothesis (EH) in the very short-term LIBOR (maturities of one month and shorter) in seven major world currencies. The calendar-time effects are found to alter long-term relations between very short-term rates in these currencies. These effects alone are not responsible for the rejection of the EH in the data, as it is rejected in most of the cases even after appropriate controls are introduced. However, such effects are capable of causing the EH to be rejected and should be controlled for …

Executive Compensation And Idiosyncratic Risk, Hum Nath Panta

Finance and Real Estate Dissertations - Archive

Executive compensation is a very heavily researched area in finance, accounting and management over the last three decades. However, there are several inconclusive issues. One of them is the relationship between idiosyncratic risk and executive compensation. Prior research findings on this issue are inconclusive. In this context, this dissertation analyzes the effects of idiosyncratic risk on executive compensation. This research seeks to discover and document the role of idiosyncratic risk on all top executive compensation, CEO compensation and non-CEO executive compensation. This study will begin with an extensive review of prior studies on executive pay to identify the determinants of …

The Opaqueness Of Fair Value Assets And Systematic Risk In The Banking Industry, Jody Wayne Bland

Inquiry: The University of Arkansas Undergraduate Research Journal

Opacity has economy-wide implications. A lack of information, whether from non-disclosure or complexity of business, creates uncertainty that even the most sophisticated of investors must face. In this paper, I analyze the relationship between opacity and the systematic risk of bank holding companies. Specifically, I find that investments in opaque assets required to be reported at fair value significantly affect the levels of financial institutions’ systematic risk. Furthermore, I provide evidence that firm investments in opaque assets contribute to systematic risk to an even greater degree during times of financial crisis.

Using Real World Applications To Policy And Everyday Life To Teach Money And Banking, Dean D. Croushore

Economics Faculty Publications

Teaching a course in money and banking can be simultaneously challenging and easy. It is challenging because teaching the course well often requires a fair amount of institutional knowledge, which an instructor may not have acquired in graduate school. However, it is easy because the course can be geared to the coverage of current events, so economic data releases and the state of the economy help the instructor develop a new course every semester and produce an interesting lecture every day.

There are many different ways to teach a course on money and banking. At most schools, the only prerequisite …

Aligning Financial Strategy With Customer Categorization Based On Environmental Scanning, Timothy Osita Anyiwe

Walden Dissertations and Doctoral Studies

Inadequate environmental scanning, poor financial strategy, and misaligned customer focus are responsible for 79% of retail profitability losses. The purpose of the qualitative study using a multiple-case study design was to explore the strategies needed to align financial strategy with customer-oriented processes in the retail industry. The research question involved understanding trends and operational risks influencing the establishment of financial alignment strategies. Porter's five forces model of customer influence, Pearce's environmental and economic factors affecting society values, and Albright's strategic planning of environmental influence served as the theoretical foundations for the study. 30 executives, managers, and team leaders in 2 …

Church Leaders' Financial Coping Strategies During A Recession, Cecil Williams

Walden Dissertations and Doctoral Studies

An economic recession can disproportionately affect the financial stability of churches because their income relies primarily on voluntary contributions. The purpose of this phenomenological study, framed by servant leadership theory, was to explore lived experiences and perceptions related to church leaders' strategies for coping with the economic downturn in 2008. A purposive sample of 20 church leaders from Tennessee was recruited to explore the changes that have been made in church operational strategies in order to cope with the recession. The interview data were iteratively examined by using keywords, phrases, and concepts and were coded into categories, which led to …

Volatility Analysis Of Precious Metals Returns And Oil Returns, Lucia Morales, Bernadette Andreosso

Conference papers

This study examines volatility persistence on precious metals returns taking into account oil returns and the three world major stock equity indices (Dow Jones Industrials, FTSE 100, and Nikkei 225) using daily data over the sample period January 1995- May 2008. We first determine when large changes in the volatility of each market returns occur, by identifying major global events that would increase the volatility of these markets; the Iterated Cumulative Sums of Squares (ICSS) algorithm helps identify the break points or sudden changes in the variance of returns in each market using the standardized residuals obtained through the GARCH(1,1) …

Predicting Currency Pair Trends Using The Fractal Market Hypothesis, Jonathan Blackledge, Kieran Murphy

Conference papers

This paper reports on the results of a research and development pro- gramme concerned with the analysis of currency pair exchange time series for Forex trading in an intensive applications and services environment. In particular, we present some of the preliminary results obtained for Forex trading using MetaTrader 4 with a new set of trend indicators deigned using a mathematical model that is based on the Fractal Market Hypothesis. This includes examples of various currency pair exchange rates considered over di erent time intervals and use of the indicators in a live trading environment to place a buy/sell order.

Bootstrapping Techniques And New Venture Emergence, John T. Perry, Gaylen N. Chandler, Xin Yao, James Wolff

New England Journal of Entrepreneurship

Among nascent entrepreneurial ventures, are some types of bootstrapping techniques more successful than others? We compare externally oriented and internally oriented techniques with respect to the likelihood of becoming an operational venture; and we compare cash-increasing and cost-decreasing techniques with respect to becoming operational. Using data from the first Panel Study of Entrepreneurial Dynamics, we find evidence suggesting that when bootstrapping a new venture, the percentage of cash-increasing and cost-decreasing externally oriented bootstrapping techniques that a venture’s owners use are positive predictors of subsequent positive cash flow (one and two years later). But, internally oriented techniques are not related to …

Did Board Configuration Matter? The Case Of Us Subprime Lenders, Maureen I. Muller-Kahle, Krista B. Lewellyn

Management Faculty Publications

Research Question/Issue: The origins of the global financial crisis have been attributed to the combination of a housing price bubble and innovative financial instruments, as well as the lack of restraint by corporate executives and boards to engage in excessive risk-taking. The rise in subprime lending between 1997 and 2005 played a crucial role in inflating the housing price bubble. We take a unique dataset of US financial institutions heavily engaged in subprime lending and ask the following research question: Did board configuration play a role in determining whether a financial institution specialized in subprime lending?

Research Findings/Insights: We use …

Finance, Fear, And Family: Issues Of Trust And The Common Ground With Terrorist Funding, David M. Cook, Timothy Smith

Australian Counter Terrorism Conference

In the immediate aftermath of al-Qaeda’s September 11 attacks on the United States of America, examinations of terrorist funding focused on the Middle Eastern and South Asian use of Hawala and non-traceable financial transactions. However, whilst the cloaking of identity is certainly a part of criminal activity for funds transfer, there are other factors. South Asia’s community banking norms align far more closely with informal systems that follow centuries-old customs of familial trust rather than reportable record keeping. Tightened restrictions on money movement in the form of identity checks and statements of purpose have coerced more than two hundred million …

Effect Of Lockup Agreements On Buyout Backed Initial Public Offerings, Grant B. Heffernan

CMC Senior Theses

Using a sample of 279 buyout backed firms, I examined the effect of lockup agreements on the firm’s stock returns. I found there to be a negative .8 percent cumulative abnormal return for the three-day period surrounding lockup expiration. Consistent with my hypothesis the CAR for the three-day period surrounding lockup expiration was less negative for buyout backed IPOs compared to venture capital backed IPOs. In addition, I found there to be an abnormal 24.24 percent increase in trading volume for the three days surrounding lockup expiration.

Imf Conditionality, Fiscal Policy, And Income Inequality In Latin America, Nicholas Egger-Bovet

CMC Senior Theses

The International Monetary Fund (IMF) is the leading international economic crisis manager, but the effects of its loans and conditionality reach far beyond overarching macroeconomic indicators. This paper will examine the consequences of IMF fiscal policy conditions on income inequality and poverty by examining cases in Latin America, and specifically Mexico during the 1980s. The role that internal politics within borrowing countries plays is also closely examined. The paper concludes with policy recommendations for the IMF to ensure the most equitable and effective means of overcoming balance of payments crises.

Take Me Out Of The Ball Game: The Efficacy Of Public Subsidies In The Success Of Professional Sports Stadiums, Jonah Chodosh

CMC Senior Theses

This paper weights the relative advantages of multiple factors that lead to the success of professional sports stadiums in major markets, though a discussion of the arguments for and against public subsidies towards these projects. Using a logit statistical model, the paper determines that the two factors determining the highest likelihood of venue success include multiple tenants and access to mass transit. The analysis demonstrates that public subsidies towards stadiums don’t generate sufficient economic returns, and that successful stadiums can be created without using taxpayer funds.

The Persistence Of Pricing Differentials In Dual-Listed Companies In Hong Kong And China, Justin Spitzer

CMC Senior Theses

Over the past two decades a number of Chinese companies have issued shares on both the Hong Kong Stock Exchange and on one of the Chinese stock exchanges. The Hong Kong-listed H-shares of Chinese dual-listed companies have traded at a persistent discount rate relative to the China-listed A-shares. As these shares represent the same ownership rights and cash flows, the shares should theoretically trade at the same price. The price differential between H-shares and A-shares should decrease as international markets continue to converge. The paper analyzes the persistence of the discount rates and the effects of both market and investor …

The Success Of Long-Short Equity Strategies Versus Traditional Equity Strategies & Market Returns, Lauren J. Buchanan

CMC Senior Theses

This study examines the performance of long-short equity trading strategies from January 1990 to December 2010. This study combines two financial screens that will yield candidates for both long and short positions for each month during the aforementioned time period. Two long-short strategies are tested: (1) perfectly-hedged, or equal allocation to long and short positions, and (2) net-long. The results of this thesis reveal that if a long-short equity manager is able to successfully determine what companies are overvalued and undervalued and actively rebalance their portfolio, perfectly-hedged and net-long strategies can generate superior risk-adjusted alpha.

The Effect Of The Introduction Of A Clearinghouse On Trading Costs: The New York Stock Exchange In The 1890s, Sara Reed

CMC Senior Theses

As one of the oldest and most innovative financial institutions, a clearinghouse efficiently clears and settles payments for equity transactions as well as other securities. However, this paper will only be concerned with common and preferred equity securities. The purpose of a clearinghouse is to reduce counterparty risk. It acts as an intermediary between two parties, so that the risk of one party failing to honor its contractual obligation is diminished. It reduces settlement risk through netting, the process of eliminating offsetting transactions, thus decreasing the amount of cash flow. I examine the impact of the New York Stock Exchange …

Quantifying The Variance Risk Premium In Vix Options, Reed M. Hogan

CMC Senior Theses

This thesis uses synthetically created variance swaps on VIX futures to quantify the variance risk premium in VIX options. The results of this methodology suggest that the average premium is -3.26%, meaning that the realized variance on VIX futures is on average less than the variance implied by the swap rate. This premium does not vary with time or the level of the swap rate as much as premiums in other asset classes. A negative risk premium should mean that VIX option strategies that are net credit should be profitable. This thesis tests two simple net credit strategies with puts …

Analyzing The Effects Of Credit Rating Changes, The Recent Financial Crisis And Other Variables On Firms' Debt Levels, Sean M. Wasserman

CMC Senior Theses

This paper utilizes a sample of firms over the years 2000–2009 to test the effects of credit rating changes, the financial crisis, interest rates, and other variables on short-term, long-term, and total debt levels on the balance sheet. Each independent variable was created using a one year lag in order to run the regressions. The values of these variables from the previous year are being analyzed to see if they can predict debt levels for the following year. The results of this paper suggest that levels of long-term and total debt are somewhat reliant on and are positively correlated with …

Privatization In Theory And Practice: The Issues To Be Considered, Berhanu Mengistu, Yacob Hail-Mariam

School of Public Service Faculty Publications

The concept of privatization is fairly recent. This paper examines the different perspectives of the privatization literature, analyzes and assesses the proposed advantages and disadvantages of privatization as a strategy for providing public goods. The paper concludes by instilling a conceptual framework that should be considered before undertaking a privatization policy.

Three Essays On Tax Salience: Market Salience And Political Salience, David Gamage, Darien Shanske

Articles by Maurer Faculty

This Article analyzes the literatures on how individuals understand taxation (i.e., tax salience). We evaluate how taxpayers respond to different presentations of tax prices both in their roles as market participants and as voters. We aim to combat naïve notions about tax salience that currently exert a pernicious influence on tax lawmaking. In particular, we argue that it is normatively desirable for governments to reduce tax salience with respect to market decision making, and that there is nothing objectionable about governments reducing tax salience with respect to political decision making.

The Importance Of Being Known: Relationship Banking And Credit Limits, Atreya Chakraborty

Accounting and Finance Faculty Publication Series

This paper measures the importance of bank-firm relationships in obtaining higher credit “limits.” We use data from a relatively unused section of the National Survey of Small Business Finance (NSSBF, 1993) on credit limits, credit sources, and contract terms for firms with lines of credit from multiple banks. This lets us isolate the credit limit that each bank provides the same firm, eliminating the need to control for often immeasurable, unreliable, or firm-specific “soft” information. For a median Line of Credit (LOC) of $250,000, we find that a bank with a five-year information advantage provides a LOC limit that is …

Essays On International Corporate Cash Holdings, Yonghong Jia

Wayne State University Dissertations

This dissertation is composed of two distinct chapters. The first chapter is concerned with the secular trends in corporate cash holdings and the determinants of the changing cash policies for seven industrialized countries--Australia, Canada, France, Germany, Japan, the US, and UK. In the first chapter, we document that a pronounced secular upward trend in cash holdings is almost systemic across sample countries over 1991-2008, with France exhibiting a modest rise and Japan a substantial decline. However, the driving forces underlying the cash pattern are not uniform across countries. While the evolution in firm characteristics necessitated elevated cash balances, the time-varying …

Three Essays On Real Estate Finance, Shuang Zhu

LSU Doctoral Dissertations

This dissertation focuses on the mortgage default behavior and the valuation of distressed properties. Three essays are included. The first essay uses New Orleans foreclosure data, where each property has three appraisals, to investigate the factors affecting appraisal bias and accuracy, and to estimate the magnitude of appraisal accuracy for distressed properties. Our main finding is that the relation between the client and the appraiser affects valuation bias. Customer employed appraisers tend to give client friendly valuation than their court appointed counterpart. Experienced and licensed appraisers render less biased valuations; while appraisers specializing in lenders tend to give lender friendly …

Monthly Seasonality In Emerging Market: Evidence From Bangladesh, Lutfur Rahman, Abu S. Amin

WCBT Faculty Publications

The presence of the seasonal anomaly in stock returns has been reported extensively in finance literature. This paper examines the presence of monthly anomaly in Dhaka Stock Exchange (DSE), the premier stock exchange of Bangladesh. Data used in the study include daily closing prices of DSE indices such as DSE all share prices index (DSI), DSE general index (DGEN) and DSE 20 index for a period of 01.01.2001-30.06.2010. Several hypotheses have been formulated; those hypotheses have been tested and dummy variable regression was used in the study. The result indicates that May and June returns are positive and statistically significant. …