This study provides new estimates of systematic risk and the cost of equity capital for the pharmaceutical, biotechnology, and medical device sectors using data for firms with publicly-traded stock on U.S. exchanges during 2001-2005 and 2006-2008. Two frameworks are employed for estimating firms’ risk and the cost of equity capital: (1) the capital asset pricing model, and (2) the Fama-French t...

The Wharton Financial Institutions Center provides a multidisciplinary research approach to the problems and opportunities facing the financial services industry in its search for competitive excellence. The Center's research focuses on the issues related to managing risk at the firm level as well as ways to improve productivity and performance. The Center fosters the development of a community...

This paper presents a simple general equilibrium model which simultaneously incorporates the banking sector and the monetary and macroprudential policy of the Central Bank. Banks are viewed as intermediaries which channel funds from cash pools and depositors who insist on the complete safety of their funds, and investors who accept risks, to borrowers who invest in risky projects. Bank debt is ...

williams, watts, macleod and mathews' (1988) model of anxiety and depression leads to the prediction that anxious patients will show mood – congreuent implicit memory bias, while depressed patients will show mood-congruent explicit memory bias.although this prediction has been supported by some researchers (denny & hunt, 1992 mathews, moog, et al , 1989 watkins, et al, 1992), the reliabili...

Levy and Arditti (1973) introduced depreciable assets into the Modigliani and Miller (1958) model, and analyzed the implications for the cost of capital. Assuming that the firm reinvests indefinitely to maintain a constant expected cash flow, they found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained. However, commitment to perpetua...

We propose a cross-sectional time-series model to assess the impact of market liberalizations in emerging equity markets on the cost of capital, volatility, beta, and correlation with world market returns. Liberalizations are defined by regulatory changes, the introduction of depositary receipts and country funds, and structural breaks in equity capital flows to the emerging markets. We control...