References: Bensinger‚ K. (2012). JP Morgan’s Huge Losses Exposes the Risky Sides of Banks. Retrieved on July 24‚ 2012 from http://articles.latimes.com/2012/may/31/business/la-fi-jpmorgan-bank-20120531 CSBS.org. (2010). TITLE X OF DODD‐FRANK—BUREAU OF CONSUMER FINANCIAL PROTECTION. Retrieved on July 25‚ 2012 from http://www
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List of abbreviations AND SYMBOLS II 1. Introduction 1 2. The conservatism principle and the asymmetric timeliness of earnings – a summary 2 2.1. The author’s motivation 2 2.2. The asymmetric sensitivity of earnings to returns 2 2.3. Earnings-return association versus cash flow-return association 5 2.4. The asymmetric persistence of earnings changes conditional on news 7 2.5. Conservatism and the asymmetric effect on the earnings response coeffcients 9 2.6 Further testing 11 3. International differences
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Conditions Are Two Factors Enough? The U.K. Evidence and IanDavidson George Leledakis valueof equityto market that Somestudiesin the1990sdocumented book valueof equity(MVE)capture valueof equity(BV/MV)and the market in in returns theU.S.market the1963of variation stock thecross-sectional that however‚ two othervariablesargued‚ researchers Other 90 period. ratio ratio thesales-to-price (S/P)andthedebt-to-equity (D/E)-have more thanBV/MVandMVE.Theevidence stockreturns powerfor
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recommendations for the hurdle rates at each of the firm ’s three divisions. Investment projects at Marriott were selected by discounting the appropriate cash flows by the appropriate hurdle rate for each division. In 1987‚ Marriott ’s sales grew by 24% and its return on equity stood at 22%. Sales and earnings per share had doubled over the previous four years‚ and the operating strategy was aimed at continuing this trend. Marriott ’s 1987 annual report stated: We intend to remain a premier growth company. This
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of the firm – Profit Maximisation and Wealth Maximisation. Let us now discuss the goals of financial management in detail. 1. Profit maximisation Profit maximisation is based on the cardinal rule of efficiency. Its goal is to maximise the returns with the best output and price levels. A firm’s performance is evaluated in terms of profitability. Profit maximisation is the traditional and narrow approach‚ which aims at maximising the profit of the concern. Allocation of resources and investor’s
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Chapter 1 A Brief History of Risk and Return Concept Questions 1. For both risk and return‚ increasing order is b‚ c‚ a‚ d. On average‚ the higher the risk of an investment‚ the higher is its expected return. 2. Since the price didn’t change‚ the capital gains yield was zero. If the total return was four percent‚ then the dividend yield must be four percent. 3. It is impossible to lose more than –100 percent of your investment. Therefore‚ return distributions are cut off on the lower
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amounts. You should always strive to keep moving forward even if progress means saving and investing $1 per day because even $1 has value since $1 dollar saved and invested will add up to $365 in an year’s time (all the while‚ not considering the return that it might yield). As you can so clearly see‚ even something as insignificant as $1 can add up to a significant amount of at least $365 in a year‚ the value and importance of which is hard to deny. Keep learning
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calculate beta based on comparable companies and to lever betas to adjust for capital structure; the appropriate risk-less rate and market risk premium; the choice of time period to estimate expected returns and the difference between the geometric and the arithmetic average as a measure of expected returns. SYNOPSIS Marriott Corporation began in 1927‚ and over the next 60 years‚ the company grew into one of the leading lodging and food service companies in the US. In 1987‚ the Marriott’s annual report
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Fin 5170 Fall 2009 The exam will consist on multiple choices‚ and problems and may be an essay question. I will ask a maximum of two questions taken from the following material covered in class Chapter 1 Describe the concept of agency problems and different ways to ameliorate agency problems in a corporation Chapter 3 Example 3.7 (pages 65-66) Use the concept of arbitrage to explain the price of Security A in table 3.8‚ and Security B in table 3.9). Compute the risk premium of both securities.
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Student #: 1480510 Introduction Capital budgeting is the most important management tool that enables managers of the organization to select the investment option that yields comprehensive cash flows and rate of return. For managers availability of capital whether in form of debt or equity is very limited and thus it become imperative for them to invest their limited and most important resource in perfect option that could prove to beneficial for the organization in the long
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