Using pooled time-series, cross-sectional data on 110 Australian companies over the period 1992-1998 an examination is undertaken whether the trademarked variant of residual income known as economic value-added (or EVA) is more highly associated with stock returns than conventional accounting-based measures. The accountingbased measures of internal and external performance include earnings, net...

We show that when a meaningful proportion of firms in an economy engage in tax avoidance strategies, the covariance between a firm’s cash flow and the market cash flows increases, thereby increasing a firm’s cost of capital. This negative externality is imposed on all firms in the economy, not just tax-avoiding firms. The negative externality results regardless of the level of uncertainty assoc...

This paper analyzes a risk averse entrepreneur’s real investment decision under incomplete markets. The entrepreneur smoothes his intertemporal consumption by investing in both a risk-free asset and a risky asset, which allows him to partially hedge against the project cash flow risk. We show that risk aversion lowers both the project value upon investment and the option value of waiting to inv...

Obtaining more accurate equity value estimates is the starting point for stock selection, value-based indexing in a noisy market, and beating benchmark indices through tactical style rotation. Unfortunately, discounted cash flow, method of comparables, and fundamental analysis typically yield discrepant valuation estimates. Moreover, the valuation estimates typically disagree with market price....

Long-term contracts between exporters and importers of LNG increase the debt capacity of large, long-lived, capital investments by reducing cash flow variability. However, long-term contracts also may limit the ability of the contracting parties to take advantage of profitable ephemeral trading opportunities. After developing a model that illustrates these trade-offs, we argue that increased LN...

We use text-based analysis of 10-K product descriptions to examine whether firms exploit product market synergies through asset complementarities in mergers and acquisitions. Transactions are more likely between firms that use similar product market language. Transaction stock returns, ex post cash flows, and growth in product descriptions all increase for transactions with similar product mark...

The groundnut plant has the ability to survive in areas of low rainfall because it is a legume and it increases soil fertility by fixing nitrogen in the soil. The study area is known by erratic and uneven rainfall while groundnut is the main cash crop in the area. The study identified the groundnut market outlets, factor affecting groundnut market outlet choice and identifies farm level women r...

This paper examines the price volatility in the silver spot (cash) market. A host of Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models are used to analyze and gain a better understanding of the volatility of silver prices. We find the TGARCH (1,1) model indicates that both positive and negative shocks do not have a significant effect on volatility in the silver spot marke...