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Book part
Publication date: 1 January 2006

Richard A. Lewin, Marc J. Sardy and Stephen E. Satchell

Investors often have much of their portfolios invested in equities that are exposed to interest rate risk. Hedging underlying exposures are not easy; whereas fixed income…

Abstract

Investors often have much of their portfolios invested in equities that are exposed to interest rate risk. Hedging underlying exposures are not easy; whereas fixed income investors have duration to immunize bond portfolios from small fluctuations in interest rates. US equity duration estimates from dividend discount models result in long durations – often in excess of 50 years. Based on the UK data, we develop an alternative approach to generate equity duration as a by-product of asset pricing. Our analysis suggests that the equity premium puzzle may comprise an important element in reconciling this approach to equity duration, with traditional DDM alternatives.

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Value Creation in Multinational Enterprise
Type: Book
ISBN: 978-1-84950-475-1

Book part
Publication date: 1 January 2006

J. Jay Choi and Reid W. Click

In a fundamental sense, creation of value is the purpose of a firm. Values – measured by profits, cash flows, stock prices, or some strategic objectives – are the ultimate reasons…

Abstract

In a fundamental sense, creation of value is the purpose of a firm. Values – measured by profits, cash flows, stock prices, or some strategic objectives – are the ultimate reasons why a firm exists. The ongoing and ever-expanding discussion of globalization, whether based on trade flows or financial flows, draws attention to the value of multinational enterprise. Existing empirical work on the impact of multinational firms, however, is inconclusive. Some observers point to the valuation discount with international operations due to the costs of agency and control and the difficulty of coordinating complex organizations and cultures. Others emphasize the value of a multinational network and the operational efficiency of a multinational enterprise (MNE). Thus, issues related to value creation are important and lively areas of business and finance. In fact, value creation is now at the frontier between the functional areas of finance and strategy. In international finance, the topic also interacts with economics in the areas of strategic trade policy and exchange rate behavior, as well as business strategy, as it relates to the management of an MNE. The role of government policy is also part of the debate, because the importance of public policy and the behavior of policymakers are elevated when finance and business become international, as evidenced by consistent attention to political risk.

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Value Creation in Multinational Enterprise
Type: Book
ISBN: 978-1-84950-475-1

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Book part
Publication date: 1 January 2006

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Value Creation in Multinational Enterprise
Type: Book
ISBN: 978-1-84950-475-1

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Book part
Publication date: 9 March 2022

Piero Formica

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Ideators
Type: Book
ISBN: 978-1-80262-830-2

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Co-creation and Smart Cities: Looking Beyond Technology
Type: Book
ISBN: 978-1-80043-602-2

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Book part (5)
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