Search results

1 – 10 of 116
Content available
Book part
Publication date: 26 April 2011

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-0-85724-541-0

Content available
Book part
Publication date: 1 May 2012

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-1-78052-752-9

Abstract

This chapter explores the advantages (for large investors) of directly owning productive assets, compared with indirect ownership through stock in corporations. Significant factors are agency costs and recent changes in the tax and regulatory environment. Recent corporate scandals have led to legislative and regulatory responses that significantly increase the monitoring costs and other burdens of becoming or remaining a public corporation. As a result, there has been a substantial increase in going-private transactions, particularly among smaller public companies. Acquisitions and minority equity positions that allow large corporations to join with smaller companies have also increased. The pressures to go private are not entirely new, however. This chapter, reflecting collaboration by professors of finance and business law, traces the legal concept that the corporation is an entity separate and apart from its owners, showing how the legal status of corporations hinders resolution of conflicts among the parties to the enterprise. Thus, there have long been fundamental flaws inherent in the corporation as the form of organization for certain activities. The current wave of Sarbanes–Oxley restructuring via private equity firms is part of a significant increase in direct ownership of major assets by institutional investors. Direct ownership prevents management expropriation of resources, and is preferable to corporate ownership whenever other alternatives for indemnification or liability limitation are available (such as insurance, limited partnerships, limited liability companies, etc.). Finally, the renewal of direct ownership is not a radical shift, but a return to long-established tradition in the organization of business activities.

Details

Research in Finance
Type: Book
ISBN: 978-1-78190-759-7

Book part
Publication date: 27 November 2017

Andrew H. Chen, James A. Conover and John W. Kensinger

Option models have provided insight into the value of flexibility to switch from one state to another (such as switching a mine or refinery from operating to closed…

Abstract

Option models have provided insight into the value of flexibility to switch from one state to another (such as switching a mine or refinery from operating to closed status). More complex flexible processes offer multiple possibilities for switching states. A fabrication facility, for example, may offer options to shift from the current status to any of several alternatives (reflecting reconfiguration of basic facilities to accommodate different operating processes with different outputs). New algorithms enable practical application of complex option pricing models to flexible facilities, improving analysts’ ability to draw sound conclusions about the effects of flexibility and innovativeness on share value. Such models also apply for options with information items as the underlying assets. Information organizations such as oil exploration and development companies may include options to shift from the current capability to any of several alternatives reflecting added abilities to handle new information sources or apply the organization’s talents in new ways. In the case of either physical or information processing, careful attention to estimating the matrix of correlations among the values of potential alternative states allows explicit integration of financial analysis and strategic analysis – especially the influence of substitutes and the anticipated reactions of competitors, suppliers, and potential new entrants.

Details

Growing Presence of Real Options in Global Financial Markets
Type: Book
ISBN: 978-1-78714-838-3

Keywords

Content available
Book part
Publication date: 25 March 2010

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-1-84950-726-4

Content available
Book part
Publication date: 26 April 2011

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-0-85724-541-0

Book part
Publication date: 11 July 2013

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-1-78190-759-7

Content available
Book part
Publication date: 1 May 2012

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-1-78052-752-9

Content available
Book part
Publication date: 25 March 2010

Abstract

Details

Research in Finance
Type: Book
ISBN: 978-1-84950-726-4

Abstract

Details

Signs that Markets are Coming Back
Type: Book
ISBN: 978-1-78350-931-7

1 – 10 of 116