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1 – 10 of over 18000Izaias Martins and Juan Pablo Perez
Drawing on the literature on entrepreneurial intention (EI), this paper develops and tests a model that aims to explain student EI by considering the valuation of entrepreneurship…
Abstract
Purpose
Drawing on the literature on entrepreneurial intention (EI), this paper develops and tests a model that aims to explain student EI by considering the valuation of entrepreneurship and the venture failure stigmatization in the closer environment of the respondent and the role of individual entrepreneurial orientation (IEO) through direct and indirect effects.
Design/methodology/approach
The paper uses a survey method for data collection. As such, this study was conducted by considering a sample of 1,155 undergraduate students from different majors. Structural equation modeling is used to validate the theoretical model.
Findings
The findings suggest that a positive closer valuation of entrepreneurship facilitates students' EI. In turn, a closer stigma of entrepreneurial failure hinders students' EI. More importantly, IEO has a significant mediating role in both of these relationships. The findings offer important theoretical and practical implications for the field of entrepreneurship education and entrepreneurial behavior.
Originality/value
The paper offers a new insight relating environmental cognitive elements and their impact on EI, besides how IEO represents a determinant role shaping these relations. The proposed model is original and makes a connection between two widely validated constructs and evidences the relationship that may exist between the orientation and the real intention of setting up a business. Moreover, IEO has rarely been addressed for verifying interaction effects. This paper is one of the very first studies that applies the IEO (individual-level of entrepreneurial orientation) as a mediating variable.
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The general aim is to represent managerial thinking on strategy choice in a context other than steady‐state growth. The model has the following features: (i) Strategy choice is…
Abstract
The general aim is to represent managerial thinking on strategy choice in a context other than steady‐state growth. The model has the following features: (i) Strategy choice is defined as the adoption of rules governing investment choice; (ii) given its strategy, management sees growth in terms of a probability distribution of growth‐paths of expected dividend; (iii) managment's valuation model closely matches its probabilistic view of growth prospects; (iv) the managerial utility function has an extended horizon. Discussion of strategy choice yields no general presumption that managment senses a conflict between its own preference and its commonsense interpretation of investors' preferences.
Ronen Barak, Shmuel Cohen and Beni Lauterbach
We collect data on CEO pay in 122 closely held firms traded on the Tel-Aviv Stock Exchange during 1995–2001. After estimating CEO pay performance sensitivity and CEO “excess pay,”…
Abstract
We collect data on CEO pay in 122 closely held firms traded on the Tel-Aviv Stock Exchange during 1995–2001. After estimating CEO pay performance sensitivity and CEO “excess pay,” we examine how these two pay attributes affect end of period (year 2001) Tobin's Q. Our main findings and conclusions are that (1) when CEO is from the controlling family, the end of period Q is negatively correlated with “excess” pay – “excess” pay to family-CEOs appears like a form of private benefits; (2) when a professional nonowner CEO runs the firm, end of period Q is positively correlated with CEO pay performance sensitivity – incentives to professional CEOs help promote firm value.
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Steve Fortin, Ahmad Hammami and Michel Magnan
This study examines the long-term link between fair valuation uncertainty and discounts/premia in closed-end funds. This study argues that, in exploring the close-end funds…
Abstract
Purpose
This study examines the long-term link between fair valuation uncertainty and discounts/premia in closed-end funds. This study argues that, in exploring the close-end funds puzzle, prior research generally omits to consider the uncertainty surrounding the measurement of funds' financial disclosure, as reflected in the fair value hierarchy, when investment specialty differs across funds.
Design/methodology/approach
Regressions were employed to explore how the fair value hierarchy affects closed-end funds' discounts/premia when investment specialty differs. The authors also examine the effects pre- and post-2012 to explore if that relationship changes due to the additional disclosure requirements enacted at the end of 2011.
Findings
The authors find that the three levels of the fair value hierarchy have effects that vary according to a fund's specialty. For equity specialized funds, Level 3 significantly increases discounts and decreases premia, suggesting the impact of valuation uncertainty that underlies Level 3 estimates; this relationship disappears (decreases in severity) for premia (discount) experiencing funds post-2012. In contrast, Level 1 and Level 2 do not have any significant effect on discounts or premia except that post-2012, Level 2 begins to display discount decreasing effects. For bond specialized funds, no significant association was noted between premia and any of the fair value levels except that post-2012, Level 3 begins to display premium increasing effects. However, results are different for discounts. The authors note that Level 1 valuations significantly increase discounts, but only post-2012; Level 2 valuations significantly decrease discounts (pre- and post-2012), consistent with such estimates incorporating unique and relevant information; and Level 3 valuations do not have a significant effect on discounts.
Originality/value
The results of this study revisit prior evidence and indicate that results about the effects of fair value measurement and the closed-end funds' puzzle are sensitive to the period length being considered and the investment specialty of the fund. The authors also note that additional disclosure regarding Level 3 valuation inputs decreases market concern for valuation uncertainty and increases the liquidity benefits of investing in Level 3 carrying funds.
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Maurizio d'Amato, Nikolaj Siniak and Giulia Mastrodonato
The purpose of this study is providing a possible methodological solution to the valuation of cyclical.assets. International Valuation Standards introduce a brand new definition…
Abstract
Purpose
The purpose of this study is providing a possible methodological solution to the valuation of cyclical.assets. International Valuation Standards introduce a brand new definition of property: the cyclical asset (International Valuation Standards Council 2017, IVS 105, p. 39 and p. 41). Among different property valuation methods, normally this kind of properties is appraised using income approach. In this group of methodology, the opinion of value is based on a proportional relationship between property value and rent. In the past years, a group of methods called cyclical capitalization has been proposed (d’Amato, 2003; d’Amato, 2013;d’Amato, 2015; d’Amato, 2017a; d’Amato 2017 b; d’Amato, 2017c). This method proposes an integration between property valuation and property market cycle.
Design/methodology/approach
Cyclical capitalization method is applied using a time series of property market rent of offices in prime location in the South Bank area in London. It consists of the determination of more than one all-risk yield to reproduce the property market cycle.
Findings
A comparison between the cyclical capitalization and two traditional capitalization rate shows how the proposed model is able to provide a stable opinion of value.
Research limitations/implications
The method may represent a contribution for the determination of the value of cyclical assets or for the mortgage lending value.
Practical implications
This paper provides the possibility to have a property valuation method less sensitive to upturn and downturn of the property market.
Social implications
The valuation based on cyclical capitalization are less sensitive to the upturn and the downturn of the market.
Originality/value
It is one of the first scientific paper addressing the problem of the determination of the value of cyclical assets.
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E.J. Roberts, P.B. McLeod and G.J. Syme
The contingent valuation technique has been significantly refinedas a method of obtaining values of goods and services in situationswhere market transactions are absent and now…
Abstract
The contingent valuation technique has been significantly refined as a method of obtaining values of goods and services in situations where market transactions are absent and now finds widespread application in the valuation of the environment, and in valuing the preservation of animal species. Applies the technique to the valuation of more conventional government services, namely the provision by the government of a range of agricultural protection services. The empirical analysis is based on contingent valuation surveys administered to a sample of Western Australian farmers.
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The purpose of this paper is to discuss the questions arising from the use of discounted cash flow (DCF) method in the context of the valuation of a Portuguese subsidiary of a…
Abstract
Purpose
The purpose of this paper is to discuss the questions arising from the use of discounted cash flow (DCF) method in the context of the valuation of a Portuguese subsidiary of a German firm. The process ended up in courts. Expert valuation was called. Two points are of particular relevance. First, given the past performance of the company and the external environment it faced, what would be a reasonable growth rate for free cash flow in the residual value period. Second, what questions arise form the assumption of seeing the subsidiary as a going concern, given that the German parent company had been opening new factories in India, China, Romania and Slovakia, and its presence in Portugal was far from guaranteed.
Design/methodology/approach
The paper is based on case study which rests on a real legal and financial business situation. The case is used to illustrate the conceptual questions related to the use of the DCF method in valuing closely held firms, particularly the very significant impact of terminal value in the process of equity valuation.
Findings
It was found that very small variations in the growth rate assumed for the residual value period make a great difference in share valuation. Thus, the work of experts had to be very finely balanced, and the judge, when deciding on the fair value to be paid to the plaintiff based on expert opinion, should give careful consideration to scenarios.
Practical implications
A relevant point of the paper is to highlight the effect on business valuation of potential growth rates forecasted for the perpetual growth phase. That rate is, in this case influenced by eventual location changes that can result from globalization of industrial activity. Portuguese shareholders in foreign controlled joint ventures, and all the other stakeholders are facing important challenges from a new world economic order, and this case clearly illustrates some characteristics of this trend.
Originality/value
The paper is useful for managers that deal with business valuation cases that end in courts, by highlighting cash flow based methods and its central assumptions, and exploring critical areas that influence the final outcome of a lawsuit that is based on differences of hypothesis used in financial forecasting.
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Developing a successful strategy for investment in property is not easy. Research shows that abnormal returns, net of transactions costs, are difficult to achieve even though…
Abstract
Developing a successful strategy for investment in property is not easy. Research shows that abnormal returns, net of transactions costs, are difficult to achieve even though there is a widespread belief amongst valuers that property markets are inefficient. This is compounded by the fact that reliable data on property performance is usually difficult to obtain. It is possible, however, to make use of publicly available data and use it in a way which may help investors guide their decisions. If abnormal returns are difficult to achieve on a consistent basis then the use of methods of analysis which give the investor some competitive advantage are worth pursuing. Although high returns have been achieved in the Hong Kong commercial property market this does not imply that those returns are abnormal in an economic sense; they may merely offer compensation for risk. By extracting equilibrium market values and implied prices from market data this paper examines abnormal returns earned by Hong Kong commercial property over the period 1985‐95 and shows that, in general, the market exhibits a high degree of efficiency. The least efficient sector was offices, which showed an average abnormal return of 1.73 per cent per quarter, although this was statistically indistinguishable from zero. Identifying when the market is under‐ and overpriced may improve the negotiating position of the investor. It may also be possible to develop similar buy‐sell strategies to exploit informational inefficiencies at the individual property level.
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