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This study documents that high book‐to‐market (value) and low book‐to‐market (glamour) stock prices react asymmetrically to both common and firm‐specific information…
This study documents that high book‐to‐market (value) and low book‐to‐market (glamour) stock prices react asymmetrically to both common and firm‐specific information. Specifically, we find that value stock prices exhibit a considerably slow adjustment to both common and firm‐specific information relative to glamour stocks. The results show that this pattern of diferential price adjustment between value and glamour stocks is mainly driven by the high arbitrage risk borne by value stocks. The evidence is consistent with the arbitrage risk hypothesis, predicting that idiosyncratic risk, a major impediment to arbitrage activity, amplifies the informational loss of value stocks as a result of arbitrageurs’ (informed investors) reduced participation in value stocks because of their inability to fully hedge idiosyncratic risk.
This paper analyses the value to a poorly diversified risk‐averse executive of a compensation package consisting of a risk free asset, restricted stock and stock options…
This paper analyses the value to a poorly diversified risk‐averse executive of a compensation package consisting of a risk free asset, restricted stock and stock options. The Lambert, Larcker and Verrecchia (1991) model is extended to include leverage and this facilitates comparison of cost to the firm and benefits to the executive of restricted stock and stock options. It also provides insight into the impact of executive risk aversion, firm leverage and underlying as set volatility on the value of a compensation package in the hands of the executive.
This study examines the relationship between managerial overconfidence and corporate financing decisions by constructing proxies for managerial overconfidence based on the…
This study examines the relationship between managerial overconfidence and corporate financing decisions by constructing proxies for managerial overconfidence based on the track records of earnings forecasts in Japanese listed firms. We find that managers have the stable tendency to forecast overly upward earnings compared to actual ones and that their upward bias decreases the probability of issuing equity in the public market by about 4.7 percent per one standard error, which economically has the strongest impact on financing decisions. This tendency is observed when we employ alternative measures for managerial overconfidence and other model specifications. However, in private placements, the choice to offer equity is not always avoided by managers. This implies that managers place private equity with the expectation of the certification effect
When a production system is operating at close to capacity then,after a period of high demand, it may take some time to restore stocksto the level necessary to provide a…
When a production system is operating at close to capacity then, after a period of high demand, it may take some time to restore stocks to the level necessary to provide a given level of stockout risk. During this period the risk of a stockout will be higher than intended. Uses simulation to show how customer service levels fall dramatically as average production levels approach available capacity and to determine the increases in levels of safety stock necessary to maintain desired customer service levels when capacity is limited.
Posits that the use of library space has become criticalin UK academic libraries. At Reading UniversityLibrary a working group analysed the nature andextent of the problem…
Posits that the use of library space has become critical in UK academic libraries. At Reading University Library a working group analysed the nature and extent of the problem and considered the parts to be played in a solution by stock weeding, additional accommodation, making better use of existing accommodation and the use of non‐print media The project demonstrated the need for involvement of a wide range of library staff, good communications with academic staff, the need for detailed information on costs and on usage of stock. This will become increasingly important as alternative means of delivering information become more widely available.
The purpose of this paper is to evaluate the impact on customer service of amalgamating two production/distribution facilities in a blood distribution network, located in…
The purpose of this paper is to evaluate the impact on customer service of amalgamating two production/distribution facilities in a blood distribution network, located in the Maritime region of Canada, into a single production facility and a satellite distribution facility.
Simulation models of the existing distribution network and the future distribution network were built. Experiments were conducted, using the two models, to compare the performance of each.
Results indicate that there is no evidence to suggest a decrease in customer service resulting from the consolidation of the two facilities. Furthermore, results indicate that this conclusion is robust with respect to lower inventory levels at the satellite and up to three road closures per annum.
The results are based on specific operational assumptions regarding the number of hospitals supplied by the satellite facility and the methods used to transport blood products between locations.
The results of this study have important implications for how vital blood products are distributed to patients in the Maritime provinces of Canada.
This paper is a case study describing a unique application of simulation methods to an important area of application. It will be of interest to readers interested in the management of blood supply chains and to researchers applying simulation methods.
THE fact that the forthcoming conference of the Library Association is to be held at Eastbourne this year should provide it with an additional official interest, as it is here that the Association Hon. Solicitor and Legal Adviser holds the important office of Town Clerk. Mr. Fovargue is the authority on Library Law in all its aspects, and is the author of several books on this important subject. We are particularly happy in being able to print an article from his pen in our special Conference number. The programme of the proceedings is by now, no doubt, in the hands of our readers, and will be found to be less crowded, but no less useful for that, than in previous years. Apart from the usual business programme, which should prove full of interest, the social side has been fully catered for and delightfully arranged. Several interesting motor trips are to take place, and delegates will be afforded an opportunity of enjoying the charms of the beautiful county of Sussex as well as those of one of our most favoured of seaside resorts.
It is well established in academic literature that self‐tender offers and corporate dividends can be used independently to effectively signal firm value. It is unclear…
It is well established in academic literature that self‐tender offers and corporate dividends can be used independently to effectively signal firm value. It is unclear, however, whether these two forms of earnings distributions can be used simultaneously. This paper is an empirical examination of the relationship between dutch auction repurchases and corporate dividend policy. This research indicates that a substantial number of firms choose to repurchase their shares in the form of dutch auctions between dividend payments. Because signalling is a likely motivation for both repurchases and cash dividends, these two events may not be independent of each other. The results of this study confirm positive stock market reaction to repurchase announcements and that firm prediction errors are significantly related to signaling variables.
This case has multiple theoretical linkages at the micro-organizational behavior level (e.g. job enrichment), but it is best analyzed and understood when examined at the…
This case has multiple theoretical linkages at the micro-organizational behavior level (e.g. job enrichment), but it is best analyzed and understood when examined at the organizational level. Students will learn about shared entrepreneurship, high performance work systems, shared leadership and virtuous organizations, and how they can develop a sustainable competitive advantage.
The case was prepared using a qualitative approach. Data were collected via the following ways: literature search; organizational documents and published historical accounts; direct observations by a research team; and on-site audio recorded and transcribed individual and group interviews conducted by a research team (the authors) with organization members at multiple levels of the firm.
John Lewis Company has been in business since 1864. In 1929, it became the John Lewis Partnership (JLP) when the son of the founder sold a portion of the firm to the employees. In 1955, he sold his remaining interest to the employee/partners. JLP has a constitution and has a representative democracy governance structure. As the firm approaches the 100th anniversary of the trust, it is faced with multiple challenges. The partners are faced with the question – How to respond to the environmental turmoil?
Complexity academic level
This case has environmental issues – How to respond to competition, technological changes and environmental uncertainty and an internal issue – How can high performance work practices provide a sustainable competitive advantage? Both issues can be examined in strategic management courses after the students have studied traditionally managed companies. This case could also be used in human resource management courses.