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1 – 10 of over 58000This study investigates the effect of Earnings per Share (EPS), Dividends per Share (DPS), and Book Value per Share (BVPS) on stock market prices in Abu Dhabi Securities Market…
Abstract
This study investigates the effect of Earnings per Share (EPS), Dividends per Share (DPS), and Book Value per Share (BVPS) on stock market prices in Abu Dhabi Securities Market. All listed companies in the Abu Dhabi Securities Market are included in this study except those companies which were listed after the starting of year 2002. In addition, those companies which had been prevented from trading in the market for one year or more during the years from 2002 to 2006 were also excluded because the available data of these companies are not adequate. As a result, among the 60 listed firms in Abu Dhabi Securities Market, 22 were excluded. Four hypotheses are under consideration in this study. The simple linear regression method was used to test the first three hypotheses based on t‐test, while the multiple linear regression method was used to test the last hypothesis based on F‐test. Moreover, the correlation method is used to support the findings. The current study found a significant effect of EPS and BVPS on stock market price in the Abu Dhabi Securities Market, whereas no significant effect of DPS was found.
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The purpose of this paper is to test whether the volatility of regional stock markets’ is common or country-specific for 46 international markets of the Asian, European, African…
Abstract
Purpose
The purpose of this paper is to test whether the volatility of regional stock markets’ is common or country-specific for 46 international markets of the Asian, European, African and Latin American regions using the Morgan Stanley Capital International daily prices in the period from January 1998 to December 2009. Further, the study has been divided into two sub-periods to distinguish the effects of the current sub-prime financial crisis and to determine whether the crisis has an impact on the fluctuations of common component of stock market volatility.
Design/methodology/approach
The paper applies the time-varying weighting methodology of Lumsdaine and Prasad (2003) to determine whether the volatility fluctuation is country-specific or common across the countries.
Findings
The results evidence that the volatility of stock returns is due to common factors, rather than country-specific ones, but this is not always the case. However, this common component is more stable in European and Latin American countries than in the Asia-Pacific and African regions. Furthermore, the results suggest that the influence of a common component has been enhanced significantly during the current sub-prime financial crisis.
Practical implications
The study has implication for domestic and international investors, portfolio managers, as well as policy-makers to implement economic and financial policy that promote stability, reduce vulnerability to crises and encourage sustained growth and living standards.
Originality/value
To the best of the authors’ knowledge, this is the first study to include four regional samples and test the common component of fluctuations of regional stock markets volatility.
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Corporate accountability and quality of corporate disclosure have impacted on many companies and banks, particularly those grown through mergers and acquisitions (M&A) and…
Abstract
Corporate accountability and quality of corporate disclosure have impacted on many companies and banks, particularly those grown through mergers and acquisitions (M&A) and companies have had to restate their financial statements. The growth of service and technology companies (particularly by M&A) presents numerous public policy, legal, regulatory and accounting issues. Some of these companies have substantial intangible assets and the accounting for M&A and investments can be manipulated to affect reported assets and earnings. The exchange of securities and conflicts of interest in such transactions can affect financial statements – all of these factors can distort strategic planning, legal analysis, performance analysis and credit analysis. Fraudulent conveyance has typically not been considered in detail in many real life transactions (processed by law firms, the SEC, accounting firms and banks), even though it is the major means of unfair and illegal wealth transfer and fraud in corporate transactions. This paper highlights some of these issues, and illustrates the role and benefits of proper legal analysis in corporate transactions, and the convergence of corporate financial analysis and legal analysis and tax/accounting analysis.
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The purpose of this paper is to examine whether Fama–French common risk-factor portfolio investors herd on a daily basis for five developed markets, namely, Europe, Japan, Asia…
Abstract
Purpose
The purpose of this paper is to examine whether Fama–French common risk-factor portfolio investors herd on a daily basis for five developed markets, namely, Europe, Japan, Asia Pacific ex Japan, North America and Globe.
Design/methodology/approach
To examine the herd behavior of common risk-factor portfolio investors, this paper utilizes the cross-sectional absolute deviations (CSAD) methodology, covering a daily data sampling period of July 1990 to January 2019 from Kenneth R. French-Data Library. CSAD driven by fundamental and non-fundamental information is assessed using Fama–French five-factor model.
Findings
The results do not provide evidence for herding under normal market conditions, either when reacting to fundamental information or non-fundamental information, for any region under consideration. However, Fama–French common risk-factor portfolio investors mimic the underlying risk factors in returns related to size and book-to-market value, size and operating profitability, size and investment and size and momentum of the equity stocks in European and Japanese markets during crisis period. Also, no considerable evidence is found for herding (on fundamental information) under crisis and up-market conditions except for Japan. Ancillary findings are discussed under conclusion.
Research limitations/implications
Further research on new risk factors explaining stock return variation may help improve the model performance. The performance can be improved by adding new risk factors that are free from behavioral bias but significant in explaining common stock return variation. Also, it is necessary to revisit the existing common risk factors in order to understand behavioral aspects that may affect cost of capital calculations (e.g. pricing errors) and valuation of investment portfolios.
Originality/value
This is the first paper that examines the herd behavior (fundamental and non-fundamental) of Fama–French common risk-factor investors using five-factor model.
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The purpose of this chapter is to outline the steps involved in obtaining venture capital funding for a start-up business. The chapter first discusses access to Venture…
Abstract
The purpose of this chapter is to outline the steps involved in obtaining venture capital funding for a start-up business. The chapter first discusses access to Venture Capitalists (VCs) and provides the reasons behind VCs’ preference for investing in a traditional C corporation rather than a limited liability company or other pass-through entity. The chapter then describes both the due diligence performed by VC's counsel and the documentation a start-up must provide to satisfy that diligence need. Next, the chapter addresses typical terms of financing deals with VCs, including the types of securities issued and the rights, preferences, and pricing of those securities. Finally, the chapter concludes with a chart identifying the VC financing terms available before and after a significant market downturn and a sample term sheet summarizing the terms of preferred stock to be issued to a hypothetical VC or VC group investing in a start-up business.
Cathy Zishang Liu, Xiaoyan Sharon Hu and Kenneth J. Reichelt
This paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their…
Abstract
Purpose
This paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their riskiness.
Design/methodology/approach
This paper measures a firm’s riskiness with idiosyncratic risk and employs the first-difference design to test the relation between idiosyncratic risk and the order of current liabilities, noncurrent liabilities and preferred stock, respectively. Further, the paper tests whether operating liabilities are viewed as riskier than financial liabilities. Finally, the authors partition their sample based on the degree of financial distress and investigate whether the results differ between the two subsamples.
Findings
The paper finds that current liabilities are viewed as riskier than noncurrent liabilities and preferred stock is viewed as less risky than current and noncurrent liabilities, consistent with the ordering on the balance sheet. Further, the paper finds that operating liabilities are viewed as riskier than financial liabilities. Finally, the authors find that total liabilities and preferred stock (redeemable and convertible classes) are viewed as riskier for distressed firms than for nondistressed firms.
Originality/value
The authors thoroughly investigate the riskiness of several classes of claims and document that the classification of liabilities and preferred stock classes is relevant to common stockholders for assessing their associated risk.
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Quanxi Liang, Jiangshan Liao and Leng Ling
This paper aims to investigate the influence of social interactions on mutual fund portfolios from the perspective of alumni network in China.
Abstract
Purpose
This paper aims to investigate the influence of social interactions on mutual fund portfolios from the perspective of alumni network in China.
Design/methodology/approach
Based on a data set that consists of 162 actively managed equity funds in China during the time period of 2003–2014, this study employs multiple linear regression model to control for organization- and location-based interpersonal connections as well as other confounding factors and clarify the causality relationship between alumni networks of mutual fund managers and their portfolios.
Findings
After controlling for organization- and location-based interpersonal connections, we find that mutual fund managers who graduated from the same college/university have more similar stock holdings and are more likely to buy or sell the same stocks contemporaneously. As a result, alumni managers exhibit a higher correlation of fund returns. Moreover, the effect of alumni relationship on mutual fund investments becomes weaker when more managers are connected within the network. We also find that valuable information is shared among alumni managers: (1) the average returns for the alumni common holdings portfolios is significantly higher than those for non-alumni holdings portfolios and (2) a long-short strategy composed of stocks purchased minus sold by alumni managers yields positive and significant risk-adjusted returns.
Practical implications
The findings suggest that information dissemination among connected fund managers could be one of the driving forces for mutual fund herding behavior, and that a portfolio of funds whose managers are educationally connected could be highly exposed to certain stocks and risks.
Originality/value
This paper contributes to the growing finance literature addressing the influence of personal connections on information dissemination that specifically contributes to price formation. It corresponds more closely to Cohen et al. (2008), who investigate college alumni connections between fund managers and corporate board members. Since the authors simultaneously examine three potentially overlapped social networks, which are based on education, locality and fund family, the authors are able to disentangle their effects on fund managers' investment decisions. Moreover, the findings suggest that institutional investors make investment decisions based on share private information, and therefore, it also contributes to the literature on fund herding behaviors (Grinblatt et al., 1995; Wermers, 1999).
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Fei Gao and Bingqiao Li
The authors examine the factors that impact the growth of exchange traded funds (ETFs) from 1990 to 2020. The authors show the first-mover and winner-takes-all effects from top…
Abstract
The authors examine the factors that impact the growth of exchange traded funds (ETFs) from 1990 to 2020. The authors show the first-mover and winner-takes-all effects from top ETF issuers. Besides the longer history and larger asset under management (AUM), the ETFs being managed by top issuers have exhibited lower risks and higher trading volume. Delisted ETFs on the contrary has a shorter history, lower AUM, higher risks, and lower trading volume. For zombie ETFs, the authors find longer history, lower risks but lower AUM and trading volume, controlled for total expense ratio, return, volatility, Amihud (2002) illiquidity, bid-ask spread, turnover ratio, as well as year, issuer, asset class and region fixed effects. The authors further study the ETFs’ AUM and trading activities over the 2008 Global Financial Crisis (GFC) and COVID-19 pandemic crisis, and find that the GFC has a significant negative impact while the COVID-19 has a positive impact on the ETFs’ popularity. The significant increase in AUM of ETF relative to common stocks during the COVID-19 is associated with retail investors’ holdings, as the authors document a significant reduction of institutional holdings at the aggregate level.
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Thomas Henker and Martin Martens
This paper aims to incorporate a market wide buying and selling pressure cost component into a spread decomposition model as spread cost component.
Abstract
Purpose
This paper aims to incorporate a market wide buying and selling pressure cost component into a spread decomposition model as spread cost component.
Design/methodology/approach
The paper extends a commonly used trade indicator spread decomposition model to include a component common to all stocks of a specialist firm and a market wide component common to all stocks.
Findings
Strong evidence is found that specialists consider this common factor cost component when they set bid and ask quotes. Some specialist firms also take the next logical step and specifically manage their firm wide stock inventories. The common factor is in percentage terms largest for securities with the highest trade frequencies.
Research limitations/implications
The relative importance of the common factor spread component decreases as the pricing grid becomes finer, but remains highly significant under the decimal trading regime.
Originality/value
This is the first study to document not‐security‐specific spread cost components that are common to all stocks for which a specialist firm makes markets and to all stocks in the market. Using the model it is shown that market wide uncertainty translates into spreads of individual securities.
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This chapter will describe and analyze the evolution of the structure, content, and other key parameters of business plans in international business plan competitions from the…
Abstract
This chapter will describe and analyze the evolution of the structure, content, and other key parameters of business plans in international business plan competitions from the beginnings of such competitions in 1991 through the current time. In particular, the chapter will describe how these competitions have evolved through the current time, the standardization of the structure and content of the plans submitted to these competitions, and the changes that have occurred in their structure and content over time. Then it will explain why these changes have occurred. Specifically, that most of the changes that have occurred in these various areas is a direct or indirect result of pressures on the competitions from the major judges used in them – namely U.S. venture capitalists. Appendices A and B will describe the evaluation criteria used in two of the major competitions – Moot Corp/Venture Labs® and the Georgia Bowl® – in more detail, while Appendices C and D will provide information on the Term Sheets and decision-making processes used by such venture capitalists. Appendix E contains four Exhibits that provide additional insights into U.S. venture capitalists’ thought processes. The chapter will conclude with a discussion of the additional changes that are likely to happen in the future.
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