1173 Posts Found

It has long been argued that “judicious” use of debt increases firm value and, therefore, shareholder wealth. The widely accepted view of capital structure is that there exists some optimal range of debt levels that maximizes shareholder wealth.

However, a recent study by the authors does not support this view. Our results suggest that, within a large sample of firms over an extended period of time, … [ Read more ]

Content: Article | Authors: Joseph A. Newman, Ph.D., Michael D. Kinsman Ph.D. | Source: Graziadio Business Report | Subjects: Finance, Management

Companies find growth enticing, but a strong return on invested capital is more sustainable.

Content: Article | Authors: Bin Jiang, Bing Cao, Tim Koller | Source: McKinsey Quarterly | Subjects: Finance, Management

Companies spend hundreds of millions on stock buyback programs that seldom achieve their intended goal.

Content: Article | Author: C.J. Prince | Source: Chief Executive | Subjects: Finance, Management

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What generates shareholder value? How can it be evaluated? How can it influence investment decisions and corporate strategy? Cash Flow Return On Investment answers all these questions by detailing the pioneering financial research carried out by HOLT Value Associates, the leading consultancy in the field.

Read this book if you want to find out what really drives the wealth generation in any business, allowing you to … [ Read more ]

Content: Book | Author: Bartley Madden | Subject: Finance

Finance professors often get criticised by ethics professors because they tell their students that the goal of the firm is to maximise shareholder value. Financial scandals such as Enron, Tyco and others are regularly blamed on the excessive focus on shareholder value maximisation. Theo Vermaelen, Professor of Finance at INSEAD, says this critique is misplaced and reflects a lack of understanding of what we teach … [ Read more ]

Content: Article | Author: Theo Vermaelen | Source: INSEAD Knowledge | Subjects: Ethics, Finance

Most companies plan to continue providing investors with frequent earnings guidance, though executives disagree about its costs and benefits.

Content: Related Content | Source: McKinsey Quarterly | Subject: Finance

Companies provide earnings guidance with a variety of expectations—and most of them don’t hold up.

Content: Article | Authors: Peggy Hsieh, S. R. Rajan, Tim Koller | Source: McKinsey Quarterly | Subject: Finance

With his latest book, historian Niall Ferguson adeptly charts the role of money throughout the history of man as well as the role of man in the history of money. From the rise of money and credit to the bond and stock markets, and the rise of insurance and real estate markets to, more recently, international finance, Ferguson demonstrates that financial knowledge is, in many … [ Read more ]

Content: Book | Author: Niall Ferguson | Subjects: Finance, History

The field of statistics is based on something called the law of large numbers: as you increase your sample size, no single observation is going to hurt you. Sometimes that works. But the rules are based on classes of distribution that don’t always hold in our world.

All statistics come from games. But our world doesn’t resemble games. We don’t have dice that can deliver. Instead … [ Read more ]

Content: Quotation | Author: Nassim Nicholas Taleb | Source: McKinsey Quarterly | Subjects: Finance, Risk Management, Statistics

Too often, industrial companies are leaving cash on the table – and missing opportunities to cement customer loyalty and boost repeat sales of their equipment – because they base decisions about bundling and pricing their services on anecdotal information. We offer a systematic approach to examining markets, leading to a much more informed perspective on the opportunities and risks in bundling and pricing services.

Content: Article | Author: David Rickard | Source: Boston Consulting Group (BCG) | Subjects: Market/Investment, Pricing

Be fearful when others are greedy, and be greedy when others are fearful.

Content: Quotation | Author: Warren Buffett | Source: The New York Times | Subjects: Investing, Wisdom

This paper presents a new database on the timing of systemic banking crises and policy responses to resolve them. The database covers the universe of systemic banking crises for the period 1970-2007, with detailed data on crisis containment and resolution policies for 42 crisis episodes, and also includes data on the timing of currency crises and sovereign debt crises. The database extends and builds on … [ Read more ]

Content: Article | Authors: Fabian Valencia, Luc Laeven | Source: International Monetary Fund | Subjects: Economics, Finance, History | Industry: Finance / Banking

When it comes to packaging, size matters. In a research paper, INSEAD Associate Professor of Marketing Pierre Chandon and co-author Nailya Ordabayeva, an INSEAD PhD student, found that changes in the shape of packaging or portions can have a big impact on our consumption patterns.

Content: Article | Authors: Nailya Ordabayeva, Pierre Chandon | Source: INSEAD Knowledge | Subject: Market/Investment

Review the following six bromides from a recent how-to article phoned in by a reigning email-marketing magnate… and then read why you should ignore them.

Content: Article | Author: Gary Levitt | Source: MarketingProfs | Subject: Market/Investment

The option valuation recognizes the value of learning. This is important, because strategic decisions are rarely one-time events, particularly in investment-intensive industrial sectors. NPV, which does not properly recognize the value of learning more before a full commitment is made, is for that reason often inadequate. In fact, its inadequacy can be stated in the precise terms of the real-options model. Of the six variables … [ Read more ]

Content: Quotation | Authors: Keith Leslie, Max P. Michaels | Source: McKinsey Quarterly | Subjects: Finance, Management

Robert Herz and FASB are preparing a radical new format for financial statements.

Content: Article | Author: Alix Stuart | Source: CFO Publishing | Subjects: Accounting, Finance

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Angelsoft was founded in 2004 with a simple idea: to bring the power of collaboration technologies to the early-stage investment industry. Today, with 410 angel groups and VCs, 11,251 investors, and 2,100 new company applications a month, Angelsoft has become a vital ecosystem where real entrepreneurs and real investors meet and collaborate in the effort to build the best new companies of the 21st Century. … [ Read more ]

Content: Online Resource | Subjects: Entrepreneurship, Finance, Venture Capital

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