We examine a company’s decision to issue public debt for the first time by analyzing its behavior around the time of obtaining its first debt rating. Contrary to our expectations, we find that firms are more likely to pay dividends in the years prior to the initial rating rather than at or after the announcement date, and that the amount of dividend payments actually appears to decline (rather ...

In this paper we extend the classical Cramér-Lundberg risk model by including tax payments. The considered tax rule is to pay a certain proportion of the premium income, whenever the portfolio is in a profitable situation. It is shown that the resulting survival probability is a power of the survival probability without tax. Furthermore, an explicit expression for the expected discounted total ...

This note gives a quali…ed a¢ rmative answer to a natural question, asked by Ohlson and motivated by some earlier work, concerning the irrelevance of dividend policy to the calculation of equity in the context of an Ohlson style general linear accounting dynamic. Does Dividend Irrelevance occur when discounting at a rate of interest R if and only if R is set equal uniquely to the dominant eigen...

This paper develops numerical methods for finding optimal dividend pay-out and reinsurance policies. A generalized singular control formulation of surplus and discounted payoff function is introduced, where the surplus is modeled by a regime-switching process subject to both regular and singular controls. To approximate the value function and optimal controls, Markov chain approximation techniq...

This paper constructs a model of corporate investment decisions under hyperbolic discounting of present values. The hyperbolic discounted present value can be interpreted as reáecting irrational myopic preferences or, as this paper demonstrates, reduced-form implications of corporate agency issues. Both cases result in an underinvestment problem for the Örm, but the Örm valuation criteria di§er...

This research is aimed at analyzing the valuation of BUMN shares with dividend discounted model and economic value added model. study also to teach early or novice investors about financial statement analysis, which contains information companies' finances actions in following years. Financial analysis not limited Price-to-Earnings Ratio (P/E Ratio) Price-to-Book Value (PBV). There are various ...

Preferred provider organizations (PPOs) represent a form of managed care in which providers agree to accept discounted fees in exchange for the expectation that their patient volume will increase or at least be maintained. Managed care plans that rely on discounted fee-for-service (FFS) payments have increased from about 10 plans in 1981 to over 700 plans in 1994. In this study, we document lev...

Prior studies have found that subjects prefer an improving sequence of income over a constant sequence, even if the constant sequence offers a larger present-discounted value. However, little is known about how these preferences vary with the size of the wage payments. In each of four studies, we find a positive relationship between the preference for increasing payments and the size of the pay...

For a general class of risk models, the dividends-penalty identity is derived by probabilistic reasoning. This identity is the key for understanding and determining the optimal dividend barrier, which maximizes the difference between the expected present value of all dividends until ruin and the expected discounted value of a penalty at ruin (which is typically a function of the deficit at ruin...