Common Risk Factors in the Retu rns on Stocks and Bonds Eugene F. Fama Kenneth R. French Journal of Financial Economics 1993 Presenter: 周立軒 Brief Saying… • This paper identifies Five common risk factors in the return on stocks and bonds – Two stock market factors‚ two bond market factors ‚ one market factor. – The five factors seems to explain all returns in stoc k market and bond market • Except the Low-Grade Bonds Agenda • • • • • Introduction The Steps of the Experiment Data & Variables Main
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75 million of stock at a $76 million pre-money valuation (“Series E Preferred”). The proposed stock instrument was a participating convertible stock (“PCPT”). This instrument functions the same as the convertible preferred stock in the event of a qualified public offering whereas in the event of a sale‚ RSC and TCV consortium not only receives the face value of the consideration‚ but also gets the equity participation. CellTech offered Metapath’s shareholders to receive common stock at closing in
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Journal of Financial COMMON Economics 9 (1981) 139-183. STOCK REPURCHASES North-Holland Publishing Company AND MARKET SIGNALLING An Empirical Study* Theo VERMAELEN lJ/niversity of British Columbia‚ Vancouver‚ BC‚ Canada V6T 2 W5 Received January 1980‚ final version received January 1981 This paper examines the pricing behavior of securities of firms which repurchase their own shares. The results are consistent with a market in which investors
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Notes to Ben Graham’s Security Analysis 2nd and 3rd Editions Vinod Palikala August‚ 2009 As Graham notes in the preface‚ the book is “concerned chiefly with concepts‚ methods‚ standards‚ principles‚ and‚ above all‚ with logical reasoning”. To get the most out of this book‚ it is essential to see past the many seemingly rigid guidelines to understand Graham’s reasoning. This is my attempt to summarize the main message Ben Graham is trying to convey. In the book‚ it is difficult to relate the
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amount. It is therefore necessary‚ to understand the nature of the relationship between dividend and value of the firm. It is in the light of this that the study examines the possible effects of a firm’s dividend policy on the market price of its common stock with reference to the Nigerian context‚ using Nestle Nigeria Plc. as case study. In so doing‚ the methodology adopted include the use of ex post facto research techniques to acquire data and the use of co-relational research techniques‚ which featured
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of the five (5) years. *The computation of the returns for corporate bonds is assumed to be for simple interest since it is not stated to be compounded annually. * Preferred stock – Initial investment increases by a factor of four (4) in a good market and only half of it in an unfavorable one. * Common stock - Initial investment increases by a factor of eight (8) in a good market but loses all its value in an unfavorable one. Julia has also decided that investments made should be in
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Stocks 1. Stocks Name Instructor XACC / 291 Date Stocks 2. Stocks shares known as “preferred”‚ because in the event of the company being liquidation‚ the preferred stock shares will receive dividends‚ and business assets before the common shares (Crook‚ 2000). If the company does not have enough money to pay both the preferred shares‚ and the common shares‚ the preferred shareholder must receive his shares first. Many different
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1. The dividend discount model (DDM) is a procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value; if the value obtained from the DDM is higher than what the shares are currently trading at‚ the stock is undervalued and vice versa. According to the DDM the price of the stock is Po= Div1/ (r-g) where Po= is the price of shares‚ Div1=Dividend next year‚ r= required rate of return‚ g=growth rate Question 4 The pattern of past and future
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dividend rate Preferred stock par value Preferred stock price Preferred stock outstanding Common stock price Common stock par value Common stock outstanding Expected next common stock dividend Long term bond yield-to-maturity Enterprise value Market risk premium 30 year Treasury bond yield-to-maturity AA 0.95 14‚325‚000 113‚895‚000 5.25% $100.00 $101.25 13‚000‚000 $53.29 $25.00 50‚000‚000 $1.95 7.55% 4‚945‚795‚000 6.00% 4.75% 1 a. What is the estimated cost of common equity for the company
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violent fluctuation of earnings caused by the cyclical nature of heavy machinery and equipment sales. Although the company’s long-term sales and earnings growth had been above average‚ its cyclical nature had dampened Wall Street’s interest in the stock substantially. (Cooper’s historical operating results and financial condition are summarized in Exhibits 1 and 2.) Initial efforts to lessen the earnings volatility were not successful. Between 1959 and 1966‚ Cooper acquired (1) a supplier of portable
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