STORRE Collection: Electronic copies of Accounting and Finance working papers.
http://hdl.handle.net/1893/10021
Electronic copies of Accounting and Finance working papers.2024-03-19T03:57:20ZInvestor Attention to Stock Recommendations
http://hdl.handle.net/1893/33153
Title: Investor Attention to Stock Recommendations
Author(s): Gavriilidis, Konstantinos; Herbst, Patrick; Kagkadis, Anastasios
Abstract: This study investigates the role of investor attention to stock recommendations on explaining the post-recommendation price drift. We construct a measure of attention to stock recommendations based on the abnormal trading volume on the days surrounding the recommendation. Our findings suggest that stock-recommendations which attract high investor attention consistently generate more pronounced post-announcement drifts than recommendations which receive low investor attention. In addition, we provide evidence that this phenomenon is mainly driven by upgrades rather than downgrades, consistent with the idea that increased volume leads to higher visibility and an increased number of unsophisticated investors buying the stock. Our findings remain robust when we control for firm-attention, analyst characteristics, recommendation characteristics and earnings announcements around the recommendation date.2016-12-29T00:00:00ZReal Options Valuation of Highly Uncertain Investments: Are UMTS-Licenses Worth their Money?
http://hdl.handle.net/1893/11729
Title: Real Options Valuation of Highly Uncertain Investments: Are UMTS-Licenses Worth their Money?
Author(s): Herbst, Patrick; Walz, Uwe
Abstract: We adopt a real options approach to analyse the value of recently auctioned UMTS- licenses, focussing on Germany as the largest European market. For that purpose we develop a real options model with an abandonment as well as a growth option. Not having an appropriate underlying security of the options, we pursue an indirect approach by assuming a stochastic process for the number of mobile phone users. As we also take account of the optimal option exercise, we have to rely on numerical analysis rather than on closed form solutions. Our real options model enables us to value the flexibility inherent in the UMTS investments. On the basis of a sensitivity analysis it turns out that two variables are crucial for a positive expected value of the investments: the initial customer base of a mobile phone company as well as the realised net cash °ows per user.2001-04-30T00:00:00ZThe Potential Impact of Enforced Lease Capitalisation in the UK Retail Sector
http://hdl.handle.net/1893/10926
Title: The Potential Impact of Enforced Lease Capitalisation in the UK Retail Sector
Author(s): Goodacre, Alan
Abstract: The main objective of the paper is to assess the potential economic consequences of the G4+1 proposed changes to lease accounting by examining companies in the UK retail sector over the 1994-99 period. The magnitude of the impact of lease capitalisation is assessed by examining the effect on nine key accounting ratios that are used in decision-making and in financial contracts. A 'constructive capitalisation' procedure is used to estimate the unrecorded lease liability and asset. Operating lease finance is shown to be very important in the retail sector, with a long-term liability approximately 3.3 times higher than on-balance sheet long-term debt; by contrast, finance leases are immaterial. Operating leased assets, the major part of which is 'land and buildings' (98%), represent a significant proportion (28%) of reported total assets. Capitalisation of operating leases would have a major impact on all nine ratios. Further, the ranking of companies changes markedly for asset turnover, interest cover and the three capital-based gearing measures, and especially for general retailers. Using credit-risk adjusted discount rates would lessen slightly the impact of capitalisation, but would have little impact on intra-sector ranking of company performance. Anticipation of future lease rental increases would have a significant impact on the level of operating lease assets/liabilities and on profit after tax. While the use of renewable short lease contracts (or break clauses) would reduce the level of operating lease assets and liabilities, substantial amounts would remain to be reported on-balance sheet. These findings contribute to the assessment of the economic consequences of a policy change requiring operating lease capitalisation. Prior research suggests that individual users of financial statements are not efficient information processors, and also that company managers do not believe that users, even in aggregate (e.g. the stock market) are efficient processors. Consequently, the significant changes in the magnitude of key accounting ratios and the major shift in company performance rankings suggest that interested parties' economic decisions are likely to be affected.2001-08-31T00:00:00ZLease Accounting Reform and Economic Consequences: The Views of Preparers and Users
http://hdl.handle.net/1893/10930
Title: Lease Accounting Reform and Economic Consequences: The Views of Preparers and Users
Author(s): Beattie, Vivien; Goodacre, Alan; Smith, Sarah Jane
Abstract: In response to perceived difficulties with extant lease accounting standards in operation worldwide, the G4+1 issued a discussion paper which adopts a 'property rights' perspective and proposes that all leases should be recognised on the balance sheet (ASB, 1999). This paper contributes to the ongoing debate by conducting a questionnaire survey of UK users and preparers to assess their views on the G4+1 proposals and on the potential economic consequences of their adoption. The results, based on 132 responses, indicate that both groups accept that there are deficiencies in the current rules, but they do not agree on the way forward. The preparers do not support the G4+1 proposals; they are lukewarm to the general principles and, in the main, object to the detailed suggestions. By contrast, the users are strongly supportive of the general principles of the proposals and neutral to the details. Both groups believe that the proposals would lead to significant economic consequences for company lessees, lessors and for users. The impact on respondents' views of familiarity with the proposals, level of lease usage, and company size, is also examined.2001-12-01T00:00:00Z