Download or read book Discounted But Not Diversified written by Sergey V. Sanzhar and published by . This book was released on 2006 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: I document a large and significant diversification discount in multi-division firms that are diversified neither industrially nor geographically. All divisions of these firms, which are called quot;pseudo-conglomeratesquot;, operate in the same finely defined industry. Since divisions of pseudo-conglomerates face similar investment opportunities, the resource allocation problem is less severe and, perhaps, non-existent in these firms. This implies that inefficient internal capital market and diversity across industries play a smaller role in the well-documented conglomerate discount. I also analyze an exogenous event - change in segment-reporting rules from SFAS 14 to SFAS 131 in 1997. I find that standalone firms start trading at a discount when they begin reporting multiple segments after the rule change. This suggests that revealing a more complex organizational structure results in value loss. Together, these results suggest that the diversification discount may be more appropriately called an quot;organizationalquot; discount.

Download or read book Explaining the Diversification Discount written by José Manuel Campa and published by . This book was released on 2008 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Diversified firms trade at a discount relatively to similar single-segment firms. We argue in this paper that this observed discount is not per se evidence that diversification destroys value. Firms choose to diversify. Firm characteristics, which make firms diversify, might also causethem to be discounted. Not taking into account these firm characteristics might wrongly attribute the observed discount to diversification. Data from the Compustat Industry Segment File from 1978 to 1996 is used to select a sample of single segment and diversifying firms. We use three alternative econometric techniques to control for the endogeneity of the diversification decision.All three methods suggest the presence of self-selection in the decision to diversify and that a negative correlation exists between firm's choice to diversify and firm value. We do a similar analysis in a sample of refocusing firms. Again, some evidence of self-selection by firms exists and we now find a positive correlation between firm's choice to refocus and firm value. Theseresults consistently suggest the importance of taking the endogeneity of the diversification status into account in analyzing its effect on firm value.

Download or read book Corporate Diversification written by Sattar Mansi and published by . This book was released on 2014 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior literature finds that diversified firms sell at a discount relative to the sum of the imputed values of their business segments. We explore this documented diversification discount and argue that it stems from the risk reducing effects of corporate diversification. Consistent with this risk reduction hypothesis, we find that (i) shareholder losses in diversification are a function of firm leverage, (ii) all equity firms do not exhibit a diversification discount, and (iii) using book values of debt to compute excess value creates a downward bias for diversified firms. When considering the joint impact to both debt and equity holders, we find that, on average, diversification is insignificantly related to excess firm value.

Download or read book Conglomerate Discount and Corporate Governance in the European Market written by Giacomo Merlini and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Conglomerate discount, the discount of diversified firms compared to portfolios of single-business companies, has been largely debated by financial literature, but researches focused almost exclusively on the U.S., finding mixed conclusions. This work aims to expand the knowledge on diversification discount and its determinants. I analyse diversification effects with an updated valuation model and with two diversification measures in six of the main European markets (France, Germany, Great Britain, Italy, Spain, Switzerland) between 2011 and 2016. Moreover, I test how institutional, financial and legal differences between Continental Europe and Great Britain affect conglomerate discount. Finally, I investigate whether a virtuous Corporate Governance, through its mitigating role on agency costs, decreases disadvantages of diversification in Continental Europe. This analysis was never performed on Continental Europe and it is the first time that new Board monitoring role's indicators (e.g., independent Directors' tenure) are used in a research on conglomerate discount. I find a significant conglomerate discount in the six economies. Moreover, according to an Index that considers the extent of diversification, conglomerates in the more external capital market-based Great Britain (where diversification benefits are lower) show higher discounts. Additionally, I find that a virtuous Corporate Governance decreases conglomerate discount, but does not eliminate it, demonstrating that agency costs not mitigated by effective monitors are one, but not the only, cause of diversification discount. Furthermore, governance practices as higher Management ownership, larger Boards, higher independent Directors' turnover and lower Institutional ownership are individually able to decrease diversification discount.

Download or read book The Little Book of Valuation written by Aswath Damodaran and published by John Wiley & Sons. This book was released on 2011-03-29 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: An accessible, and intuitive, guide to stock valuation Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language that any investors can understand, so you can make better investment decisions when reviewing stock research reports and engaging in independent efforts to value and pick stocks. Page by page, Damodaran distills the fundamentals of valuation, without glossing over or ignoring key concepts, and develops models that you can easily understand and use. Along the way, he covers various valuation approaches from intrinsic or discounted cash flow valuation and multiples or relative valuation to some elements of real option valuation. Includes case studies and examples that will help build your valuation skills Written by Aswath Damodaran, one of today's most respected valuation experts Includes an accompanying iPhone application (iVal) that makes the lessons of the book immediately useable Written with the individual investor in mind, this reliable guide will not only help you value a company quickly, but will also help you make sense of valuations done by others or found in comprehensive equity research reports.

Download or read book The International Diversification Puzzle when Goods Prices Are Sticky written by Mr.Charles Engel and published by International Monetary Fund. This book was released on 2009-01-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a two-country monetary DSGE model in which households choose a portfolio of home and foreign equities, and a forward position in foreign exchange. Some nominal goods prices are sticky. Trade in these assets achieves the same allocations as trade in a complete set of nominal state-contingent claims in our linearized model. When there is a high degree of price stickiness, we show that not much equity diversification is required to replicate the complete-markets equilibrium when agents are able to hedge foreign exchange risk sufficiently. Moreover, temporarily sticky nominal goods prices can have large effects on equity portfolios even when dividend processes are very persistent.

Download or read book Longitudinal Analysis of Labor Market Data written by James J. Heckman and published by Cambridge University Press. This book was released on 2008-10-30 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Longitudinal Analysis of Labor Market Data presents a set of papers by leading scholars on methods for analysing the longitudinal data that is available on numerous topics of interest to social scientists. Because many sources of longitudinal data record labour market phenomena such as unemployment, labour supply, earnings mobility, job turnover and participation in training programmes, all of the papers collected in this volume focus on models of the labour market. The main methodological points, however, are more general and apply to such diverse areas as demography, life science analysis and training evaluation, to name only a few, potential avenues of application. The book contains important methodological contributions to the emerging field of longitudinal analysis and is of interest to a wide range of social scientists.

Download or read book Deregulation and Diversification of Utilities written by Michael A. Crew and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Coinsurance Effect of Corporate Diversification written by Dominik Nußmann and published by Springer. This book was released on 2017-08-22 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dominik Nußmann comprehensively analyzes the coinsurance effect of corporate diversification by first providing a structured review of all relevant findings presented in the financial economics and accounting literature. Based on this review, he examines important accounting and economic implications of the coinsurance effect by means of two comprehensive empirical analyses. In particular, he finds that diversified firms benefit from coinsurance through financial as well as accounting synergies which entail considerable value-enhancing potentials.

Download or read book Applied Mergers and Acquisitions written by Robert F. Bruner and published by John Wiley & Sons. This book was released on 2016-02-08 with total page 1056 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to the world of mergers and acquisitions Why do so many M&A transactions fail? And what drives the success of those deals that are consummated? Robert Bruner explains that M&A can be understood as a response by managers to forces of turbulence in their environment. Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigor in the development of their M&A deals. By addressing the key factors of M&A success and failure, Applied Mergers and Acquisitions can help readers do this. Written by one of the foremost thinkers and educators in the field, this invaluable resource teaches readers the art and science of M&A valuation, deal negotiation, and bargaining, and provides a framework for considering tradeoffs in an effort to optimize the value of any M&A deal.

Download or read book Why Agency Costs Explain Diversification Discounts written by Peter Högfeldt and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study diversification within the real estate industry because of its relative transparency: portfolio management of assets with well-defined market prices. Diversification is over property types and geographical regions. The major cause of the diversification discount is not diversification per se but anticipated costs due to rent dissipation in future diversifying acquisitions. Firms expected to pursue non-focusing strategies do indeed diversify more; are valued ex ante at a 20% discount over firms anticipated to follow a focusing strategy; are predominantly privately controlled and extensively using dual-class shares. The ex ante diversification discount is therefore a measure of agency costs.

Download or read book Chop Shop Valuation Models and the Diversification Discount written by Belén Villalonga and published by . This book was released on 2001 with total page 422 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book International Convergence of Capital Measurement and Capital Standards written by and published by Lulu.com. This book was released on 2004 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Cross border Mergers and Acquisitions written by O. Morresi and published by Springer. This book was released on 2014-11-19 with total page 333 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since their explosion in the mid-1990s, mergers and acquisitions (M&As) have turned into a global phenomenon with growing prevalence. A large number of theoretical and empirical studies focus on cross-border deals from several perspectives, such as motives, strategic issues, and performance. Most books treat these studies as specific characteristics of M&As, paying little attention to the distinctive elements that differentiate them from domestic operations. In short, there is now a real need for a fresh review and categorization of cross-border deals. Cross-Border Mergers and Acquisitions is the first book to provide readers with a complete guide to understanding the main concepts, theories, and results driving cross-border M&As. Morresi and Pezzi present an original framework that ties together the growing body of theoretical and empirical studies on the topic. This work describes the relevance of the phenomenon in terms of its economical, geographical, and historical impact, and analyzes the market- and accounting-based performance of cross-border deals.

Download or read book Corporate Finance written by Stephen Ross and published by McGraw-Hill/Irwin. This book was released on 2009-10-09 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Finance, by Ross, Westerfield, and Jaffe emphasizes the modern fundamentals of the theory of finance, while providing contemporary examples to make the theory come to life. The authors aim to present corporate finance as the working of a small number of integrated and powerful intuitions, rather than a collection of unrelated topics. They develop the central concepts of modern finance: arbitrage, net present value, efficient markets, agency theory, options, and the trade-off between risk and return, and use them to explain corporate finance with a balance of theory and application. The well-respected author team is known for their clear, accessible presentation of material that makes this text an excellent teaching tool. The ninth edition has been fully updated to reflect the recent financial crisis and is now accompanied by Connect, an exciting new homework management system.

Download or read book Economic Diversification written by United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Economic Stabilization and published by . This book was released on 1989 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Investing Made Simple written by Anthony Loviscek and published by Currency. This book was released on 2010-05-12 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: Watch Your Money Grow! In today’s complicated financial jungle, the possibilities for turning capital into fortunes are endless. Investing Made Simple is the perfect guide for helping the would-be investor gain the knowledge and confidence essential for long term wealth building. Topics include: Stocks Bonds Real estate Futures Derivatives IPOs and second offerings Insurance international perspectives Shopping for bargains Diversification Stock charts All terms are thoroughly explained, and the pros and cons of each route, as well as how to get started, are outlined. From helping you understand your investment goals to managing your portfolio, Investing Made Simple is the complete consumer guide to understating and finding investment opportunities that work for you. Look for other Made Simple Books Accounting Made Simple Arithmetic Made Simple Biology Made Simple Bookkeeping Made Simple Business Letters Made Simple Chemistry Made Simple English Made Simple French Made Simple German Made Simple Ingles Hecho Facil Investing Made Simple Italian Made Simple Learning English Made Simple Mathematics Made Simple The Perfect Business Plan Made Simple Philosophy Made Simple Physics Made Simple Psychology Made Simple Sign Language Made Simple Spanish Made Simple Spelling Made Simple Statistics Made Simple Touch Typing Made Simple Your Small Business Made Simple www.broadwaybooks.com