Download or read book Expectations Management Corrections and the Cost of Equity Capital written by Lisa A. Hinson and published by . This book was released on 2018 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extant research on the relation between voluntary disclosure and the cost of equity capital assumes that management discloses information to credibly adjust investor expectations and, thus, lower cost of capital. My study is motivated by the low likelihood that all management forecasts yield the credible information underlying the beneficial effect on cost of equity capital. I survey the literature on management forecast incentives and find that expectations management and corrections are major management forecast motivations. I expect these motivations to be less effective in conveying credible and truthful information and reducing information uncertainty. As expected, relative to firms with transparency-motivated management forecast policies, firms with policies containing higher percentages of forecasts motivated by expectations management and corrections have higher cost of equity capital. Relative to firms that do not forecast, firms with transparency-motivated policies have lower cost of capital; firms with corrections-motivated policies also have lower cost of capital but to a lesser extent than transparency-motivated firms; and firms with expectations-management-motivated policies do not have lower cost of capital. Thus, evidence suggests that underlying forecast motivations impact the management earnings forecast policy-cost of equity capital relation.
Download or read book Earnings Expectations Security Valuation and the Cost of Equity Capital written by Richard A. Crowell and published by . This book was released on 1967 with total page 520 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Outperform with Expectations Based Management written by Tom Copeland and published by Wiley. This book was released on 2005-10-03 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: CEOs and managers live and die by delivering superior performance to shareholders. This is why expectations-based management has been developed. Outperform with Expectations-Based Management (EBM) introduces a revolutionary new performance metric that links performance standards, performance measurement, and the achievement of performance. It's easy to say that if a CEO can get performance measurement right, then performance improvement will follow. But what is the "right" measure of performance, and how do you use it to improve performance? Authors Tom Copeland and Aaron Dolgoff answer these questions and many more, as they show you how to find the measure of performance that has the strongest link to the creation of wealth for the owners of both public and private companies. They answer the puzzle of why growth in earnings is not correlated with shareholder returns and explain the under- and over-investment traps. And they explain how clear communications to investors and managers alike improve value. The bottom line is that share prices go up when companies exceed expectations -- short-term and long-term -- of income statement and balance sheet performance and daily operating value drivers. Gain a complete understanding of EBM and discover how to do this, and much more, while staying competitive in an unforgiving business environment.
Download or read book Cost of Capital written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2008-02-25 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this long-awaited Third Edition of Cost of Capital: Applications and Examples, renowned valuation experts and authors Shannon Pratt and Roger Grabowski address the most controversial issues and problems in estimating the cost of capital. This authoritative book makes a timely and significant contribution to the business valuation body of knowledge and is an essential part of the expert's library.
Download or read book The Market Effects of Breaking a String of Meeting Or Beating Analysts Expectations written by Yuan Xie and published by . This book was released on 2006 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Value at Risk and Bank Capital Management written by Francesco Saita and published by Elsevier. This book was released on 2010-07-26 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt: Value at Risk and Bank Capital Management offers a unique combination of concise, expert academic analysis of the latest technical VaR measures and their applications, and the practical realities of bank decision making about capital management and capital allocation. The book contains concise, expert analysis of the latest technical VaR measures but without the highly mathematical component of other books. It discusses practical applications of these measures in the real world of banking, focusing on effective decision making for capital management and allocation. The author, Francesco Saita, is based at Bocconi University in Milan, Italy, one of the foremost institutions for banking in Europe. He provides readers with his extensive academic and theoretical expertise combined with his practical and real-world understanding of bank structure, organizational constraints, and decision-making processes. This book is recommended for graduate students in master's or Ph.D. programs in finance/banking and bankers and risk managers involved in capital allocation and portfolio management. Contains concise, expert analysis of the latest technical VaR measures but without the highly mathematical component of other books Discusses practical applications of these measures in the real world of banking, focusing on effective decision making for capital management and allocation Author is based at Bocconi University in Milan, Italy, one of the foremost institutions for banking in Europe
Download or read book Modern Corporate Finance Investments Taxation and Ratings written by Peter Brusov and published by Springer. This book was released on 2018-11-11 with total page 571 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph is devoted to a modern theory of capital cost and capital structure created by this book’s authors, called the Brusov–Filatova–Orekhova (BFO) theory, and its application to the real economy. BFO theory promises to replace the traditional theory of capital cost and capital structure by Nobel laureates Modigliani and Miller. This new theory in particular, presents a possible explanation to the causes of the recent global financial crisis. The authors of the book describe the general theory of capital cost and capital structure that can be applied to corporations of arbitrary age (or with arbitrary lifetime) and investment projects with arbitrary duration. The authors illustrate their theory with examples from corporate practice and develop investment models that can be applied by companies in their financial operations. This updated second edition includes new chapters devoted to the application of the BFO theory in ratings, banking and other areas. The authors also provide a new approach to rating methodology highlighting the need for including financial flow discounting, the incorporation of rating parameters (in particular, financial ratios) into the modern theory of capital structure - BFO theory. This book aims to change our understanding of corporate finance, investments, taxation and rating procedures. The authors emphasize that the most used principles of financial management should be changed in accordance to BFO theory.
Download or read book Estimating the Cost of Capital Implied by Market Prices and Accounting Data written by Peter Easton and published by Now Publishers Inc. This book was released on 2009 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimating the Cost of Capital Implied by Market Prices and Accounting Data focuses on estimating the expected rate of return implied by market prices, summary accounting numbers, and forecasts of earnings and dividends. Estimates of the expected rate of return, often used as proxies for the cost of capital, are obtained by inverting accounting-based valuation models. The author describes accounting-based valuation models and discusses how these models have been used, and how they may be used, to obtain estimates of the cost of capital. The practical appeal of accounting-based valuation models is that they focus on the two variables that are commonly at the heart of valuations carried out by equity analysts -- forecasts of earnings and forecasts of earnings growth. The question at the core of this monograph is -- How can these forecasts be used to obtain an estimate of the cost of capital? The author examines the empirical validity of the estimates based on these forecasts and explores ways to improve these estimates. In addition, this monograph details a method for isolating the effect of any factor of interest (such as cross-listing, fraud, disclosure quality, taxes, analyst following, accounting standards, etc.) on the cost of capital. If you are interested in understanding the academic literature on accounting-based estimates of expected rate of return this monograph is for you. Estimating the Cost of Capital Implied by Market Prices and Accounting Data provides a foundation for a deeper comprehension of this literature and will give a jump start to those who have an interest in these topics. The key ideas are introduced via examples based on actual forecasts, accounting information, and market prices for listed firms, and the numerical examples are based on sound algebraic relations.
Download or read book The Cost of Equity Capital written by William R. Purvis and published by . This book was released on 1973 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Modern Corporate Finance Investments and Taxation written by Peter Brusov and published by Springer. This book was released on 2015-06-02 with total page 374 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph is devoted to the modern theory of capital cost and capital structure and its application to the real economy. In particular, it presents a possible explanation to the causes of global financial crisis. The authors of the book modify the theory of Nobel Prize winners Modigliani and Miller to describe an alternative theory of capital cost and capital structure that can be applied to corporations with arbitrary lifetime and investment projects with arbitrary duration. The authors illustrate their theory with examples from corporate practice and develop investment models that can be applied by companies in their financial operations.
Download or read book Generalized Modigliani Miller Theory written by Peter Brusov and published by Springer Nature. This book was released on 2022-03-28 with total page 371 pages. Available in PDF, EPUB and Kindle. Book excerpt: The original theory of capital cost and capital structure put forward by Nobel Prize Winners Modigliani and Miller has since been modified by many authors, and this book discusses some of them. The book’s authors have created general theory of capital cost and capital structure – the Brusov–Filatova–Orekhova (BFO) theory, which generalizes the Modigliani–Miller theory to encompass companies of an arbitrary age (and arbitrary lifetime). Despite the availability of this more general theory, the classical Modigliani–Miller theory is still widely used in practice. In this book, the authors for the first time generalize it for cases of practical relevance: for the case of variable profit; for the case of advance tax-on-profit payments and interest on debt payments; for the case of several tax-on-profit and interest on debt payments per period; and for the combination of all three effects. These generalizations lead to valuable theoretical results as well as significantly widen of practical application this theory in practice and increase of the quality of finance management of the company. As well, the book investigates the applications of said results in corporate finance, investments, taxation and ratings, where employing a generalized Modigliani–Miller theory can be very fruitful.
Download or read book Cost of Capital Website written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2014-04-21 with total page 1344 pages. Available in PDF, EPUB and Kindle. Book excerpt: A one-stop shop for background and current thinking on the development and uses of rates of return on capital Completely revised for this highly anticipated fifth edition, Cost of Capital contains expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. There is also discussion of the volatility created by the financial crisis in 2008, the subsequent recession and uncertain recovery, and how those events have fundamentally changed how we need to interpret the inputs to the models we use to develop these estimates. The book includes new case studies providing comprehensive discussion of cost of capital estimates for valuing a business and damages calculations for small and medium-sized businesses, cross-referenced to the chapters covering the theory and data. Addresses equity risk premium and the risk-free rate, including the impact of Federal Reserve actions Explores how to use Morningstar's Ibbotson and Duff Phelps Risk Premium Report data Discusses the global cost of capital estimation, including a new size study of European countries Cost of Capital, Fifth Edition puts an emphasis on practical application. To that end, this updated edition provides readers with exclusive access to a companion website filled with supplementary materials, allowing you to continue to learn in a hands-on fashion long after closing the book.
Download or read book Investment Valuation written by Aswath Damodaran and published by John Wiley & Sons. This book was released on 2002-01-31 with total page 1014 pages. Available in PDF, EPUB and Kindle. Book excerpt: Valuation is a topic that is extensively covered in business degree programs throughout the country. Damodaran's revisions to "Investment Valuation" are an addition to the needs of these programs.
Download or read book The Handbook of Equity Style Management written by T. Daniel Coggin and published by John Wiley & Sons. This book was released on 2003-04-07 with total page 514 pages. Available in PDF, EPUB and Kindle. Book excerpt: A fully updated guide to equity style management Pioneered by Nobel laureate William Sharpe, equity style management is derived from a correlation analysis of various equity style categories, such as value, growth, small cap, large cap and foreign stocks. In the Third Edition of The Handbook of Equity Style Management, twenty contributors from industry and academia help readers understand various equity style management issues, including equity style indices, different approaches to equity style measurement, foreign stock investing, tactical style management, behavioral aspects of equity style, and equity style benchmarks for manager selection and performance attribution. This updated edition gives readers the rationale behind equity style management, and shows how new strategies can be used to manage risk and improve returns.
Download or read book Bank Capital and the Cost of Equity written by Mohamed Belkhir and published by International Monetary Fund. This book was released on 2019-12-04 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of publicly listed banks from 62 countries over the 1991-2017 period, we investigate the impact of capital on banks’ cost of equity. Consistent with the theoretical prediction that more equity in the capital mix leads to a fall in firms’ costs of equity, we find that better capitalized banks enjoy lower equity costs. Our baseline estimations indicate that a 1 percentage point increase in a bank’s equity-to-assets ratio lowers its cost of equity by about 18 basis points. Our results also suggest that the form of capital that investors value the most is sheer equity capital; other forms of capital, such as Tier 2 regulatory capital, are less (or not at all) valued by investors. Additionally, our main finding that capital has a negative effect on banks’ cost of equity holds in both developed and developing countries. The results of this paper provide the missing evidence in the debate on the effects of higher capital requirements on banks’ funding costs.
Download or read book Financial Risk Management and Derivative Instruments written by Michael Dempsey and published by Taylor & Francis. This book was released on 2021-05-17 with total page 275 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Risk Management and Derivative Instruments offers an introduction to the riskiness of stock markets and the application of derivative instruments in managing exposure to such risk. Structured in two parts, the first part offers an introduction to stock market and bond market risk as encountered by investors seeking investment growth. The second part of the text introduces the financial derivative instruments that provide for either a reduced exposure (hedging) or an increased exposure (speculation) to market risk. The fundamental aspects of the futures and options derivative markets and the tools of the Black-Scholes model are examined. The text sets the topics in their global context, referencing financial shocks such as Brexit and the Covid-19 pandemic. An accessible writing style is supported by pedagogical features such as key insights boxes, progressive illustrative examples and end-of-chapter tutorials. The book is supplemented by PowerPoint slides designed to assist presentation of the text material as well as providing a coherent summary of the lectures. This textbook provides an ideal text for introductory courses to derivative instruments and financial risk management for either undergraduate, masters or MBA students.
Download or read book Cost of Capital in Litigation written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2010-10-26 with total page 323 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cost of Capital in Litigation addresses cost of capital issues in litigation and discusses major decisions, highlighting how to avoid errors that have often been made by experts. The book helps the attorney and valuation expert understand the decisions within the context of the theory of cost of capital and includes a chapter on cross-examining experts on cost of capital issues. Throughout, there are citation to relevant material and cross-reference to Cost of Capital: Applications and Examples, Fourth Edition.
