Finance and Financial Management Commons^™

Essays On Investments, Michael Farrell

Theses and Dissertations--Finance and Quantitative Methods

The first chapter studies mutual funds. I model intraquarter trading and use a genetic algorithm to estimate the trade pattern that is most consistent with the fund's daily reported returns. I validate the model empirically on a sample of institutional trades from Ancerno and I confirm that the method more accurately predicts daily holdings when compared to existing naive assumptions. Further, my method is substantially more accurate in classifying a fund's tendency to supply liquidity, and this increased precision has important implications for identifying superior performing funds. Specifically, a long-short strategy based on the model's liquidity provision measures earns significant …

Does Managerial Risk-Taking Incentive For R&D Investments Translate To Future Earnings?, Ha Yun Cho

CMC Senior Theses

The convex pay-off structure of executive stock options (ESO) incentivizes CEOs to increase their firm stock-return volatility, thereby increasing their wealth in option portfolio. In this paper, I address two research questions. I first test if this managerial incentive induces executives to take on more risky projects in R&D that increases stock- return volatility, hence, boosting their personal wealth. I derive vega to measure managerial incentive, and vega is a dollar change in ESO for a 0.01 change in stock- return volatility. I find that there is a positive and statistically significant relationship between vega and R&D investment, which suggests …

Deal Or No Deal: The Relationship Between Firm Determinants & Venture-Capital Financing Decisions, Raghav Prasad

CMC Senior Theses

In this paper, I analyze how firm attributes such as their age, industry, nature of industry, spinoff status and debt ratio influence venture-capital financing decision. I look at a sample of 280 firms that went public in the United States between 2015- 2019. This paper finds that firm age and debt are negatively related to the likelihood of being venture-capital backed. It also finds that firms in technology and biotechnology industries are more likely to be backed by a venture-capitalist.

Risk Management Strategies For Sustainable Rental Real Estate Profitability, Christina Fusch

Walden Dissertations and Doctoral Studies

Some rental property owners lack risk management strategies that enable them to budget for sustainable profitability. This study provides rental property owners with risk management strategies for sustainable profitability to maintain business stability during market volatility and create stable, well-maintained housing for tenants. A mini ethnographic case study was conducted to determine the key risk management budgeting strategies rental property owners in the greater Seattle area have used to achieve sustainable profitability for at least 10 years. Enterprise risk management was applied to assess the role risk played in small rental property businesses and budgeting for sustainable profitability. Participant observation, …

Political Connectedness, Firm Performance And Corporate Risk Taking: Are Emerging Markets Different?, Augustine Tarkom

Electronic Theses and Dissertations

Existing literature exploring the effect of politically connected firms on their performance and risk-taking seems to offer decisive results for the emerging and the developed market. However, from professionals and anecdotal evidence, both markets do not exhibit similar characteristics. Considering these characteristics, instability of the government, lack thereof of adequate governance structure, I revisit the topic. This study comprises 27 advanced and 20 emerging economies for the years 1992 through 2016. I find that sound political environment drives risk-taking in advanced markets, while political connections drive corporate risk-taking in emerging markets. I also find that political institutions and political connections …

An Analysis Of The Financial Reporting Quality Of Early Adopters Of Accounting Standards Update, Asu 2016-02, Hannah D. Eubanks

Theses and Dissertations

In 2016, the Financial Accounting Standards Board updated the way lease transactions are reported. This paper offers insight into the financial reporting quality of the early adopters of Accounting Standards Update on Leases, ASU 2016-02. Methodology modeled after an event study on clawback provisions conducted by Dehaan, Hodge, and Shelvin (2013) aids in the development of the hypothesis and matched-sample event study using restatements and audit opinions as proxies for financial reporting quality. It is hypothesized that the early adopters of ASU 2016-02 will have better financial reporting quality when compared to a control group. Results do not support the …

A Systematic Public Capital Management And Budgeting Process, Arwiphawee Srithongrung, Juita-Elena (Wie) Yusuf, Kenneth A. Kritz

School of Public Service Faculty Publications

This chapter introduces the readers to a public capital management and budgeting process and its role in generating public infrastructure networks. The main purpose of the chapter is to describe the normative public capital management and budgeting practices that are recommended by the public finance literature. These normative practices are segregated into four main components: (1) long-term capital planning, (2) capital budgeting and financial management, (3) capital project execution and project management, and (4) infrastructure maintenance. Given that the literature recommends specific practices to maximize efficiency in public capital spending, the four main components, combined, are referred to as the …

Crummer Suntrust Portfolio Recommendations: Crummer Investment Management [2019], Tim Foard, Omar Hussein, Mary Karangelen, Rasha Mesharafa, Appy Nahar, Sarah Passero, Sam Philpott

Crummer Truist Portfolios

SunTrust endowed this portfolio to provide scholarships for future Crummer students and to give current students a practical, hands on learning opportunity. This year we are pleased to be able to award $50,000 in scholarships. We are extremely grateful for SunTrust’s generosity and investment in higher education. We have all learned a great deal from this experience and the responsibility of managing real money. Our first challenge is to establish a portfolio position that takes advantage of economic opportunities while avoiding unnecessary risk and conforming to the Crummer SunTrust Investment Policy Statement (IPS). We are also tasked by the IPS …

Revenue Diversification To Improve And Maintain Service Offerings Of Nonprofit Organizations, Ganga Kosala Bandara Heengama

Walden Dissertations and Doctoral Studies

Leaders of nonprofits businesses adopt revenue diversification strategies to create innovative program services, creative ways to source materials, utilize volunteers and community partnerships, and identify business solutions related to solving societal problems. To continue providing services, it is crucial for nonprofit leaders to maintain adequate financial resources. The purpose of this single-case study was to explore revenue diversification strategies used by 3 leaders of a nonprofit organization in western California of the United States using Markowitz's modern portfolio theory as the conceptual lens. Data were collected through in-depth semistructured interviews and examination of organizational documents, internal archival data, and online …

Strategies To Sustain Small Accounting Businesses For Longer Than 5 Years, John Chidi Nwabueze

Walden Dissertations and Doctoral Studies

Small businesses represent over 99% of all United States businesses and are engines of economic growth and job creation. In 2018, the Small Business Administration estimated that a total of 30.2 million small businesses employed over 58.9 million workers. Small businesses are known to face significant challenges, and most fail within 5 years of startup. The purpose of this multiple case study was to explore strategies that owners of small accounting businesses used to sustain their organizations for longer than 5 years. The population in this study consisted of 5 owners of small accounting businesses in Michigan. The conceptual framework …

Essays On External Forces In Capital Markets, Marcus Painter

Theses and Dissertations--Finance and Quantitative Methods

In the first chapter, I find counties more likely to be affected by climate change pay more in underwriting fees and initial yields to issue long-term municipal bonds compared to counties unlikely to be affected by climate change. This difference disappears when comparing short-term municipal bonds, implying the market prices climate change risks for long-term securities only. Higher issuance costs for climate risk counties are driven by bonds with lower credit ratings. Investor attention is a driving factor, as the difference in issuance costs on bonds issued by climate and non-climate affected counties increases after the release of the 2006 …

Quantifying The Announcement Effects In The U.S. Lumber Market, Zarina Mamadalievna Ismailova

Graduate Theses, Dissertations, and Problem Reports (ETD)

The impact of public reports on price fluctuations has been widely investigated in many commodity markets, but little attention has been paid to the lumber market. In this thesis, we examine the impact of two housing market reports, namely the New Residential Construction (Housing Starts) and the New Residential Sales reports, on the U.S. lumber futures market. Our results suggest that the housing starts report does indeed affect lumber market volatility, while the New Residential sales report exerts a minor impact on lumber price volatility. Price volatility is measured by changes future contract prices for lumber. We further find that …

Summary, Initial Observations, And Getting To A Tentative Theory Of Public Investment Behavior, Arwiphawee Srithongrung, Juita-Elena (Wie) Yusuf

School of Public Service Faculty Publications

This chapter evaluates the 12 countries' capital management practices according to the systematic public capital management and budgeting process described in Chapter 1. The chapter characterizes and classifies the management practices of the twelve countries based on the authors' evaluation using the case study descriptions. The authors offer some initial observations based on comparisons across the case study countries and analysis of relationships between capital management and budgeting practices and political, economic, and public sector variables. The chapter proposes a tentative theory of public investment behavior and offers five propositions regarding the factors driving different practices across the case study …

Financial Strategies For Long-Term Success In Women-Owned Small Businesses, Melissa Renee Dyer

Walden Dissertations and Doctoral Studies

In the United States, many small businesses fail within the first 5 years due to poor implementation of long term financial strategies. Researchers and business practitioners indicated that women small business owners face challenges in financing their small businesses beyond 5 years due to a lack of long-term financial strategies. The purpose of this qualitative multiple case study was to explore long term financial strategies women use to sustain their small businesses beyond 5 years. The general theory of entrepreneurship was the conceptual framework for this study. Data were collected from semistructured interviews with 11 women small business owners in …

Veterans Affairs Employees’ Perceptions Of Financial Incentives, Organizational Justice, Satisfaction, And Performance, Kingsley Chigbo Ihekwoaba

Walden Dissertations and Doctoral Studies

Veterans Affairs (VA) inconsistently distributes financial incentives, which might affect how VA employees perceived organizational justice, affecting employees’ job satisfaction and performance. The purpose of this qualitative transcendental phenomenological study was to explore the lived experiences of VA employees that informed their perceptions of their workplaces’ levels of organizational justice, their job satisfaction, and their performances due to inconsistent distribution of financial incentives by gathering data through interviews with 13 VA employees from the Southeastern United States. The research question concentrated on the lived experiences of VA employees with respect to the inconsistent distribution of financial incentives, and how these …

Strategies For Increasing Employee Morale And Mitigating Turnover In The Banking Industry, Deniqua Arshay Ladson

Walden Dissertations and Doctoral Studies

Bank leaders who fail to implement effective leadership strategies experience low employee morale and high employee turnover. The estimated failure rate of bank industry leadership to attain some organizational targets such as desired levels of employee morale, employee retention, and profitability is as high as 60%. The purpose of this single case study was to explore strategies bank leaders implemented to improve employee morale and mitigate employee turnover. The population for this study included 4 bank leaders in the United States who successfully applied effective leadership to improve morale and mitigate employee turnover for more than 5 years. Data were …

Effective Revenue Diversification Strategies In Nonprofit Organizations, Jennifer R. Niswonger

Walden Dissertations and Doctoral Studies

Nonprofit organization leaders increasingly encounter social burdens and financial difficulties, jeopardizing ongoing success and organizational sustainability. The purpose of this single-case study was to explore revenue diversification strategies used by 3 leaders of a small nonprofit organization in the mid-Atlantic region of the United States through the conceptual lens of modern portfolio theory. Data were collected via in-depth semistructured interviews, and member checking was used to facilitate accuracy, consistency, and integrity. Methodological triangulation included a document review and analysis of financial statements, tax returns, strategy objectives, the organizational website, social media, and nonprofit data reports. Data from documents and interviews …

An Empirical Examination Of Economic Determinants Of Financial Ceo Compensation: A Comparative Study On Pre And Post Financial Crisis Periods, Mahfuja Malik, Eunsup Daniel Shim

WCBT Faculty Publications

Inadequate risk monitoring and the executive incentive system of US financial institutions are considered to be significant factors in exacerbating the 2008 financial crisis, and regulators attempted to reform the executive compensation system in the post-crisis period. In this study, we conduct a comparative analysis of the economic determinants of the compensation for chief executive officers (CEOs) between the pre- and post-financial crisis periods, using data from US financial service institutions, since this is the sector that has been most affected by the financial crisis. We find that the mean values of total compensation and its incentive components, including cash …

Evaluating Kentucky State Pension Plans In The 2000s And Best Practices Moving Forward, Sarah Alegria

MPA/MPP/MPFM Capstone Projects

The Commonwealth of Kentucky sponsors three different pension retirement systems. This includes Kentucky Employee Retirement System, Teacher’s Retirement System, and Kentucky’s Judicial Form of Retirement System. Kentucky has one of the worst funded pension retirement plans and is currently facing shortfalls of about $43 billion (PEW, 2013). Between 1998-2008, Commonwealth of Kentucky’s legislators made many detrimental policy decisions that negatively affected its Pension Retirement System. The most impacting includes:

• Enhancements of Benefits in the Nineties
• Changing Final Compensation from the average of five-years to the average of three-years
• Mandated Yearly Cost of Living Adjustments (COLA)
• Not requiring the State to …

Uni Finance Newsletter, 2019, University Of Northern Iowa. Department Of Finance.

Department of Finance Newsletter

News about the activities of the Department of Finance.

Are Women Executives Hurting Firm Performance? An Examination Of Gender Diversity On Firm Risk, Performance, And Executive Compensation, Krystal Diane Sung

CMC Senior Theses

In order to assess the continuing imbalance of top executives between genders, I examine the effects of gender diversity within top management teams on firm risk, performance, and executive compensation. Capitalizing on previous analysis, I apply three unique differentiators. First, I utilize current data from 2012 to 2017 from Compustat, CRSP, and ExecuComp. Second, I provide a unique subset view on a firm and individual performance of female CEOs to examine executive compensation. Third, my scope of analysis expands to S&P Composite 1500 companies. I use separate models to estimate the effect of gender diversity on firm risk by examining …

How Does The Thai Stock Market Respond To Monetary And Fiscal Policy Shocks?, Suthawan Prukumpai, Yuthana Sethapramote

DLSU Business & Economics Review

This study examines the impacts of monetary and fiscal policy on the Thai stock market using the structural vector autoregressive (SVAR) model. In addition to the data on the market aggregate level, we also consider the response of stock prices at the sectoral level. The empirical results show that the Thai stock market significantly responds to both monetary policy and fiscal policy. However, monetary policy has stronger effects on both real output and stock prices than those of fiscal policy. Fiscal policy shocks affect the stock market only for the next two to three quarters. In addition, sector indices wereused …

Regulatory Changes, Board Monitoring And Earnings Management In Nigerian Financial Institutions, Ishaq Ahmed Ishaq Ahmed Mohammed, Ayoib Che-Ahmad, Mazrah Malek

DLSU Business & Economics Review

This paper explores the heterogeneity of board of directors and shareholders involvement in the audit committee in addressing the question of whether the board of directors and audit committee shareholders are effective in suppressing earnings management after the implementation of 2011 revised Code of Corporate Governance in Nigeria. The paper utilized data generated after the implementation of the new Code. It examines explicitly board effectiveness and audit committee shareholder chairman on earnings management in Nigerian financial institutions. The study utilizes a dynamic panel data model of the generalized method of moment (GMM) in analyzing the data. The empirical results suggest …

Legal Setbacks, Disbursement Sudden Stops, And Fiscal Stimulus: An Empirical Characterization Of A Recent Philippine Fiscal Experience, Lawrence B. Dacuycuy, Mariel Monica R. Sauler

DLSU Business & Economics Review

Recognizing the importance of expanding fiscal spending programs and improving disbursement rates, the Aquino administration implemented the Disbursement Acceleration Program (DAP) in 2011. Acting as a fiscal stimulus but packing a fiscal surprise, the program has reportedly succeeded in improving fiscal expenditure performance until the Supreme Court stopped it based on constitutional grounds. While there were official claims that it was effective in spurring growth, no study has been offered to investigate plausible mechanisms leading to expansions in output. This study proposes the use ofa dynamic stochastic general equilibrium (DSGE)model to stochastically simulate and compute simple fiscal multipliers to understand …

Time-Varying Weather Effects On Thai Government Bond Returns, Anya Khanthavit

DLSU Business & Economics Review

This study proposed a state-space model that allows time-varying weather effects on asset returns. It resolves the model misspecification of the unrealistic, fixed effect assumption commonly made by previous weather studies. The model was applied to examine the weather effects on Thai government bond returns from July 2, 2001, to December 30, 2015. Kalman filtering was used in the estimation. The study found that the weather effects were time-varying. They were wandering in the early sample period but disappearing in the later period. The effects were not co-integrated with the market’s inefficiency levels.

Compensation Clawback Policies And Corporate Lawsuits, Matteo P. Arena, Nga Nguyen

Finance Faculty Research and Publications

Purpose

The purpose of this paper is to study the relation between compensation clawbacks and lawsuits and analyze how these two corporate disciplinary forces interact. This paper hypothesizes that by allowing firms to recoup compensation from managers who breach their fiduciary duty, clawbacks provide a form of discipline that potentially reduces the likelihood of managerial wrongdoing, which, in turn, lowers the risk of corporate lawsuits.

Design/methodology/approach

This paper identifies whether or not a company in the S&P 1500 had a clawback policy between 2007 and 2014 by searching the company filings and press releases. The authors also construct different proxies …

Financing Method And Abnormal Returns In Corporate Mergers And Acquisitions, Patrick Thomas

CMC Senior Theses

This study analyzes the impact of merger and acquisition financing method on buyer cumulative abnormal returns. The model builds on findings in previous literature by including deal structure variables, company variables, industry variables, time variables, and post-acquisition announcement return data from 2000 to 2018. The analysis does not find a statistically significant relationship between cash plus debt/stock financing and cumulative abnormal returns. However, significant coefficients for buyer and target industry suggest that deal structure varies and ultimately effects cumulative abnormal returns within specific industries. Additionally, significant results for buyer profitability and time variables provide insight on how the financial market …

Are The Public Subsidies Of Professional Sports Stadiums Worth The Cost Of Building Them?, Spencer Abraham

CMC Senior Theses

The results generated by this research argue that, in the future, communities should take into account crime and other social costs as they analyze the merits of investing in new sports complexes and that a failure to consider these factors could constitute a serious dereliction on the parts of the public officials who are ultimately responsible for new facility investment decision making. Moreover, both this research and previous studies of the economic effects of new sports facilities, strongly indicate that public entities considering funding new facilities do a more in depth independent study of the likely economic consequences of their …

M&A Performance: Market’S Initial Reaction As An Unbiased Indicator Of Post-Acquisition Performance, Nikolaos Papageorgiou

CMC Senior Theses

This paper investigates the reliability of the stock market’s initial reaction to M&A announcements as a predictor of actual post-acquisition performance. The two prevailing methods for evaluating M&A performance are event studies (stock market-based measures) and accounting-based measures. The present study combines these two performance evaluation approaches in a single empirical examination. Both the post-merger buy-and-hold abnormal returns and changes in ROA are used as actual post-acquisition performance variables. The acquirer’s cumulative abnormal return (CAR) around the announcement is used as the market predictor variable. An econometric model is employed to test the predictive power of the announcement-period CAR on …

The Predictive Power Of The Vix Futures Prices On Future Realized Volatility, Siran Zhang

CMC Senior Theses

Many past literatures have examined the predictive power of implied volatility versus that of historical volatility, but they have showed divergent conclusions. One of the major differences among these studies is the methods that they used to obtain implied volatility. The VIX index, introduced in 1993, provides a model-free and directly observable source of implied volatility data. The VIX futures is an actively traded VIX derivative product, and its prices are believed to contain market’s expectation about future volatility. By analyzing the relationship between the VIX futures prices and the realized volatilities of the 30-day period that these VIX futures …