Risks and Costs of Socially Responsible Investing
Socially responsible investors don’t want their money to support companies that do things they disapprove of, such as selling tobacco, alcoholic beverages or weapons. They may be willing to sacrifice some financial returns for their convictions—but how much must they give up? In one of the first studies of socially responsible investing on a risk-adjusted basis, Wharton’s Christopher C. Geczy, Robert F. Stambaugh and David … [ Read more ]
Content: Article | Source: Knowledge@Wharton | Subjects: Finance, Social Responsibility (ESG) | Industry: Investing
Cadbury Schweppes (A): The Strategic Dilemma of Trebor Bassett; Cadbury Schweppes (B): Managing for Value; Cadbury Schweppes
Value Based Management is often thought of from strictly a financial perspective. In this Case Study series about a VBM initiative at Cadbury Schweppes, the authors show that managing for value is 80% about people and only 20% about numbers.
The series traces the origins of the initiative starting in 1996 and follows its progression through to 2002, showing the benefits, limitations, time frames, and … [ Read more ]
Content: Case Study | Authors: Fares Boulos, Marjolein Bloemhof, Philippe Haspeslagh, Regine Slagmulder, Tomo Nodo | Source: INSEAD | Subjects: Finance, Organizational Behavior | Industry: Food Products/Service | Company: Cadbury Schweppes
Interbrew’s IPO
In January 2001 the CEO of Interbrew received what was likely the worst news of his career. With the ink on the company’s Initial Public Offering still wet, the British Government announced it was rescinding Interbrew’s €3.68 billion takeover of Bass Brewers, a deal it had affected just four months prior and which served as a selling point in its recent IPO. François de Breteuil … [ Read more ]
Content: Case Study | Authors: François de Breteuil, Herwig Langohr | Source: INSEAD | Subject: Finance | Industry: Food Products/Service | Company: Interbrew
Investment, Compensation, and Risk Aversion
In this article, Erwan Morellec of the University of Rochester models the effect of managerial risk aversion on manager’s decision making. He shows that risk-averse mangers are more likely to invest early. In his words: “to speed up investment, leading to significant erosion of the value of the option to invest.” Why is this? Again quoting: “By investing, the manager transforms … [ Read more ]
Content: Article | Author: Erwan Morellec | Source: Social Science Research Network (SSRN) | Subjects: Finance, Organizational Behavior
Jeremy Hope and Robin Fraser
Gaming the numbers is squeezing the life and spirit out of many companies and their employees. It’s a mentality that says, “Do what I said last January, no matter what.”
Content: Quotation | Source: Optimize Magazine | Subjects: Finance, Organizational Behavior
The Credit-Derivatives Market
From Buyouts To Small Biz
Mezzanine funds, big players in the mega-mergers of the 1980s, now cast their net in search of smaller growth firms.
Content: Article | Author: Suzanne McGee | Source: Inc. Magazine | Subjects: Entrepreneurship, Finance
How To Make E-Billing Pay
Software vendors are gradually closing the gaps in online billing and payment systems, but getting rid of paper is not as simple as it sounds.
Content: Article | Author: Samuel Greengard | Source: Business Finance Magazine | Subjects: Finance, IT / Technology / E-Business
Who Rules Accounting?
An interesting look at the dynamics involved between Financial Accounting Standards Board (FASB), Congress and the SEC, including some historical background on battles, notably the ongoing one concerning expensing stock options.
Content: Article | Author: Craig Schneider | Source: CFO Publishing | Subjects: Accounting, Finance
Adding an Ethical Dimension to Portfolio Management
Socially Responsible Investing (SRI) means different things to different people, but essentially is investing in firms that treat their employees well, care for the environment, and make products or perform services that are aligned with the goals and desires of the investors (for example, many investors may refuse to buy tobacco stocks). For as long as I can remember there has been a debate … [ Read more ]
Content: Article | Authors: Denis Dupre, Isabelle Girerd-Potin, Raghid Kassoua | Source: Social Science Research Network (SSRN) | Subjects: Finance, Industry Specific | Industry: Investment Banking
Timothy J. Rohner
Corporations typically run on annual budget cycles, but new ventures can’t. They need money when they need money-typically, a commitment of funding should come every few months. Those commitments should come only after the venture has reached clearly defined milestones. Poker players will tell you that, in seven-card stud, most of the money is lost on the fourth and fifth cards, as players indulge the … [ Read more ]
Content: Quotation | Source: Context Magazine | Subjects: Entrepreneurship, Finance
Birth of a New Budget Culture
New Web-based applications offer to streamline the budgeting process, but such a change can be painful. In addition to software upgrades, companies must overhaul the corporate culture.
Content: Article | Author: Tad Leahy | Source: Business Finance Magazine | Subjects: Finance, IT / Technology / E-Business
A Phenomenon of the Market: Stock Market-Based Mergers and Acquisitions
New research explains who acquires whom, whether payment is made in cash or stock, what valuation consequences arise from mergers, and why there are merger waves.
Content: Article | Authors: Andrei Shleifer, Robert W. Vishny | Source: Capital Ideas | Subject: Finance
A Non-Random Walk Through Financial Innovation: Four Titans Explain How It Occurs
In 1986 Merton Miller, a Chicago economist and an eventual Nobel laureate in economic sciences, asked if any 20-year period in history had resulted in a tenth as much financial innovation as the previous two-decade span. His own answer was a resounding ‘no’. He then went on to argue that innovation was flagging. Four titans from that period addressed Miller’s question at the Milken Institute’s … [ Read more ]
Content: Article | Source: Knowledge@Wharton | Subjects: Finance, Innovation | Industry: Finance / Banking
What’s Your Company Worth Now?
Knowledge is power, and knowledge of your company’s value is the ultimate power tool. Here’s what you need to calculate your own magic number.
Editor’s Note: check out the online-only companion to this article, “Priced to Sell” at
Content: Article | Author: Randall Lane | Source: Inc. Magazine | Subjects: Finance, Small Business
A Framework for Thinking About Cost Drivers
MVPs of MVA
Which companies created the most wealth for shareholders last year? Read on.
Editor’s Note: though the rankings are topical, the description of MVA and EVA (very high-level, no nuts and bolts) is of use for those ignorant of these concepts.
Content: Article | Author: Stephen Taub | Source: CFO Publishing | Subjects: Finance, Management
The Pack Mentality: A Behavioral Finance View of Stock Price Comovement
By looking carefully at data on individual stock prices, it is easy to find many examples of “comovement” – groups of stocks whose prices tend to move together. For instance, prices of stocks in the same industry tend to move together, as do the prices of small-cap stocks, value stocks, and closed-end funds.
Content: Article | Authors: Andrei Shleifer, Jeffrey Wurgler, Nicholas Barberis | Source: Capital Ideas | Subjects: Finance, Industry Specific | Industry: Investment Banking
Financing Supply Chains
A few farsighted finance executives are managing their supply chain as a virtual corporation, finding innovative ways to reduce costs and increase earnings.
Content: Article | Author: Richard H. Gamble | Source: Business Finance Magazine | Subject: Finance