The Stock Market and Corporate Investment: A Test of Catering Theory Christopher Polk London School of Economics Paola Sapienza Northwestern University‚ CEPR‚ and NBER We test a catering theory describing how stock market mispricing might influence individual firms’ investment decisions. We use discretionary accruals as our proxy for mispricing. We find a positive relation between abnormal investment and discretionary accruals; that abnormal investment is more sensitive to discretionary accruals
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Isaac Degaetano & Thomas Abela Jacques Poot‚ Matthew Roskruge (2013). “ Internationalisation of Education and Returns in the Labour market” Education delivered in any given country undoubtedly contributes to human capital that is employed in another country. This could happen in the form of a person obtaining education in his/her home country and subsequently works abroad‚ or vice versa. A person may even seek to obtain the highest returns to education by both studying and working abroad. This paper
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Quiz 2 Corporate Finance NAME ______________________ Apring 2013 2012 70 pts Show all work MC=5pts each 1. Find the EPS (y-axis) // EBIT (x-axis) crossover point of the following two capital structure plans. Complete the table and Draw the graph and show all the points including crossover‚ where line crosses y-axis‚ and the three EBITs below 30pts Assets = $3‚000‚000 Stock Price = $20 Interest Expense = 12% PLAN I D/E = 1.1 Recession Expected
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Behavioural finance Understanding how the mind can help or hinder investment success By Alistair Byrne With Stephen P Utkus For investment professionals only – not for retail investors. 1 Why bother with behavioural finance? This document aims to provide a practical introduction to general tenents of behavioural finance and highlights the potential lessons for successful investing. The behavioural biases discussed in this guide are ingrained aspects of human decision-making
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amount someone is willing to pay today for an asset. The market value of an asset reflects its historical cost. 3. For this question‚ use the information for Sports Baseballs‚ Inc. Sports Baseballs‚ Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses.................
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Excess of Investment Cost Over Book Value Acquired The most common problems in applying the equity method‚ it concerns investment costs that exceed the proportionate book value of the investee company. Unless the investor acquires its ownership at the time of the investee’s conception‚ paying an amount equal to book value is rare. A number of possible reasons exist for a difference between the book value of a company and the price of its stock. A company’s value at any time is based on a multitude
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ROI Project: Phase #1 Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Like it or not‚ with the current state of the economy‚ as well as‚ enforced implications of the Affordable Care Act‚ a large number of hospitals and healthcare agencies will close their doors for good this year. Perhaps
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Capital structure describes how a corporation has organized its capital—how it obtains the financial resources with which it operates its business. Businesses adopt various capital structures to meet both internal needs for capital and external requirements for returns on shareholders investments. As shown on its balance sheet‚ a company’s capitalization is constructed from three basic blocks: Long-term debt. By standard accounting definition‚ long-term debt includes obligations that are not
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Precise and appropriate‚ David Epstein attacks the theory of athlete evolution in his informative and eye opening TED talk. Epstein dissects the truth behind athletic success; it is not evolution at all‚ it is the growth of knowledge. This enthralling TED talk takes you through the technology‚ training and specialization of sport that has produced athletes that are “stronger‚ faster‚ bolder‚ and better” than ever (David Epstein‚ 2014‚ 14:16). While the direct‚ popular‚ success of athletes is discussed;
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Preschool Education as a Social Investment Researches play a significant role in the society because it is through these that knowledge is enhanced and expanded. Aside from that‚ the different breakthroughs brought about by researches enable people to understand the world they live in. One important research which examined preschool education as a social investment was written by W. Steven Barnett. His study‚ entitled Benefit-Cost Analysis of the Perry Preschool Program and Its Policy Implications
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