5,816 results on '"RATE of return"'
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2. Data from University of Szczecin Update Knowledge in Economics (The Concept of Using the Excess Rate of Return in the Study of the Impact of EU ETS on the Value of Enterprises)
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Rate of return ,Return on investment ,Business ,Economics - Abstract
2023 SEP 8 (VerticalNews) -- By a News Reporter-Staff News Editor at Economics Week -- New study results on agriculture have been published. According to news originating from the University [...]
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- 2023
3. Empirical analysis of dynamic spillovers between exchange rate return, return volatility and investor sentiment
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Škrinjarić, Tihana, Lovretin Golubić, Zrinka, and Orlović, Zrinka
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- 2021
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4. Internal Rate of Return on Investment in Higher Education in Europe
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Janusz Jablonowski
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i26 ,o12 ,Higher education ,mincer wage equation ,business.industry ,Law of Europe ,j24 ,Internal rate of return ,Monetary economics ,Investment (macroeconomics) ,KJ-KKZ ,c83 ,higher education ,Economics ,internal rate of return ,business ,Law ,european union - Abstract
The study aims to update the well-settled issue in literature of rate of return on investment in higher education in Europe. The proposed approach slightly modifies the existing methodology based on the Mincer equation, using an updated set of data for the period 2014–2016 from the European Central Bank's ‘Household Finance and Consumption Survey’. The results obtained, ranging between 13% and 21%, are higher compared to historical records for the years 1996–2013. As for the microeconometric estimates of the Mincer-type equation, they are sound and comparable, although showing higher margins in relation to the recent figures. Thus, they may suggest an increasing trend in valuation and importance of human capital based on high school degree, especially for the Central–Eastern European Union countries, resulting probably from rapid economic and cultural convergence.
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- 2021
5. The rate of return to a pharmacy education investment in the U.S
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Ioana Popovici and Manuel J. Carvajal
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Inflation ,media_common.quotation_subject ,Wages and salaries ,Pharmaceutical Science ,Pharmacy ,Pharmacists ,03 medical and health sciences ,0302 clinical medicine ,0502 economics and business ,Econometrics ,Economics ,Humans ,050207 economics ,Real interest rate ,Robustness (economics) ,media_common ,Rate of return ,business.industry ,05 social sciences ,030206 dentistry ,Investment (macroeconomics) ,Nominal interest rate ,Students, Pharmacy ,Education, Pharmacy ,Pharmaceutical Services ,business - Abstract
Background Potential pharmacy students need a financial frame of reference to compare alternative fields of study or even determine if studying is financially worthwhile. Objective Estimate the rate of return to a pharmacy education investment in the U.S. Methods A model is used to estimate the rate of return to a pharmacy education. It is formulated using exclusively present values (i.e., dollars at 2019 prices). Several assumptions are made regarding the individual getting the education, the costs incurred, the amount borrowed, and the benefits derived. The robustness of the model is tested using sensitivity analysis and the rate of return is recalculated each time. Results The estimated real rate of return to a pharmacy education investment in the U.S., devoid of inflation and under the assumptions initially postulated in the model, is 4.89%. The nominal rate of return is 6.44%. Post-estimation sensitivity analysis shows that the real rate of return is relatively inelastic with respect to changes in eight inputs considered, thus indicating robustness in the results of the model. Conclusions The real rate of return estimated here establishes pharmacy as a financially viable occupation for young individuals possessing the aptitude and commitment to pursue a patient-centered career in medication management.
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- 2021
6. Technical note: Modified simple average internal rate of return
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Abdollah Jassbi and S A Behnam Babaei
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Economics and Econometrics ,Simple average ,Statistics ,General Engineering ,Economics ,Internal rate of return ,Technical note ,Education - Published
- 2021
7. The Rate of Return to Education in Iran
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Ali Reza Oryoie and Atiyeh Vahidmanesh
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Rate of return ,Economics and Econometrics ,Entrepreneurship ,0502 economics and business ,05 social sciences ,Individual data ,Ordinary least squares ,Economics ,Demographic economics ,050207 economics ,Rural area ,Construct (philosophy) ,050203 business & management - Abstract
There is no doubt that education is the key to development. An important step in evaluating the condition of education in a society is to estimate the rate of return to education in that society. This paper estimates the private rate of return to schooling for men born in 1951–1983 in Iran using a pseudo-panel fixed-effect model. This is the first study that measures unbiasedly the rate of return to schooling in Iran. We construct the pseudo-panel data using six repeated cross sections of Household Expenditures and Income Surveys between 2008 and 2013. Our estimates show that the overall rate of return is around 9% based on the pseudo-panel fixed-effect approach. The estimates reveal a downward bias in ordinary least squares with individual data. This study also evaluates the rate of return to education in rural and urban areas. The rate of return in urban and rural areas is about 7.8 and 10%, respectively.
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- 2021
8. Actuarial model for estimating the optimum rate of return of a joint-and-survivor annuity portfolio
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Luis C. Franco, Gabriel A. Agudelo, and Paolo Saona
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Statistics and Probability ,Rate of return ,050208 finance ,Actuarial science ,05 social sciences ,General Engineering ,02 engineering and technology ,Annuity (American) ,Artificial Intelligence ,0502 economics and business ,0202 electrical engineering, electronic engineering, information engineering ,Economics ,Portfolio ,020201 artificial intelligence & image processing - Abstract
In actuarial science related to pension systems, it is widely assumed that the rate at which the reserves cover the payment of annuities (calculated for a given number of lives) is equal to the expected rate of return of the portfolios in which such reserves are invested. Given this assumption, pension fund managers may take greater risks to realize higher returns and subsequently reduce their pension liabilities. This study demonstrates that the discount rate used to calculate a two-life annuity and the expected return on the portfolio are not necessarily equal. A stochastic-based model is used to determine the proper discount rate for calculating the two-life annuity. The model includes fluctuations of both the interest rate and the payments made by the annuity. In general, this study contributes to the stability of pension systems by determining the appropriate discount rate when computing required actuarial reserves or the portfolio’s required rate of return given a reserve.
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- 2021
9. Spatial Disparity of Rate of Return on Education in Indonesia and Local Spillover Impact in Metropolitan Areas
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Chotib, Renny Nurhasana, and Yusuf Faisal Martak
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Rate of return ,Government ,Inequality ,Spillover effect ,media_common.quotation_subject ,Return on investment ,Economics ,Demographic economics ,Investment (macroeconomics) ,Metropolitan area ,Welfare ,Education ,media_common - Abstract
The types of inequality problems in Indonesia are very diverse, one of which is the rate of return on investment in education. To date, this problem has not been resolved by the government. The existence of this imbalance is thought to have a negative effect on the level of welfare of an area where the rate of return is relatively lower. This study aims to see the magnitude of the rate of return on education investment for each district and city in Indonesia. In addition, an analysis of the spatial effect of returns on education investment is also carried out on the level of welfare of an area in adjacent areas. Using the Mincer model to measure the rate of return for each region, the results show that the rate of return on investment in education in all districts and cities in Indonesia varies widely, ranging from 1% to 11%. Also, spatial analysis using the Spatial Autoregressive model shows that any increase in the percentage of return on investment in education in a certain area will decrease the level of welfare in the surrounding area. The proper regulations specifically related to equality of benefit after getting the education and the ease of migration are needed to overcome each region's negative spillover effect.
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- 2021
10. Assessment and ways to increase the rate of return in the Russian medium-sized agricultural enterprises
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Mindlin, Yury, Novikov, Mikhail, and Yakovleva, Olga
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Rechnungswesen ,Economics ,Finanzwirtschaft, Rechnungswesen ,Mittelbetrieb ,accounting ,Wirtschaft ,costs ,medium-sized firm ,investment income ,economic success ,Russia ,Financial Planning, Accountancy ,Kapitalertrag ,Rate of return ,Enterprise ,Return ratios ,Financial system ,Rate of return assessment ,Kosten ,ddc:330 ,Russland ,wirtschaftlicher Erfolg ,farm ,Agrarbetrieb - Abstract
The rate of return (profitability) is the category that allows evaluation of financial, production and other costs of the enterprise. The detailed analysis of return ratios enables to regulate the enterprise financial system and has a positive effect on its financial performance. The article considers the method of the rate of return assessment and suggests the ways to increase it. The case of the medium-sized agro-industrial company was used. Based on the financial performance of the enterprise, the range of the rate of return indicators was calculated, such as fixed assets, rate of return on current assets and on equity capital, gross profit margin, operating and net profit margin. Based on the calculations, the authors show that the rate of return of the enterprise increased, and a high efficiency of operations was observed. However, at the same time, there are tasks to be solved. One of them is to introduce a payment schedule. The analysis of the financial effect of the payment schedule introduction showed that it increased the current rate of return of the enterprise by 10%.
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- 2022
11. Gender and Age as Determinants of Expected Rate of Return on Human Capital
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Ireneusz Górowski and Bartosz Kurek
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Rate of return ,Higher education ,business.industry ,05 social sciences ,General Engineering ,050201 accounting ,Human capital ,Age and gender ,0502 economics and business ,Economics ,General Earth and Planetary Sciences ,Demographic economics ,business ,050203 business & management ,General Environmental Science - Abstract
Purpose: The aim of the article is to examine the selected determinants of the expected rate of return on human capital. Methodology: We conducted an anonymous survey of expected salaries among the Accounting and Controlling students at the Cracow University of Economics, which provided a unique setting for the analysis. On the basis of collected data for the cost of living and the cost of professional education for every participant, we used the human capital model developed by Dobija to compute the perceived level of the human capital of each individual. Then, we compared the expected salaries with the perceived levels of human capital and computed expected rates of return on human capital. The following research methods are used: literature review, statistical tests, econometric modeling. Findings: On the sample of 754 respondents, we found that male students expect a higher rate of return on their human capital than female students, while older students expect a lower rate of return on human capital than younger students. Research limitations: Only one field of study was used to measure the determinants of the expected rate of return on human capital. Originality: We contribute to the salary expectations and human capital literature by identifying a significant gender salary expectations gap that holds even after considering individually assessed costs of living and professional education. Our findings are consistent with the well-known observation that women tend to expect lower salaries than men.
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- 2020
12. Policy Implication of the Rate of Return Criterion in Higher Educational Investment Planning
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Mir Obaidur Rahman
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Rate of return ,Economics ,General Earth and Planetary Sciences ,Monetary economics ,Educational investment ,General Environmental Science - Abstract
Financing educational programmes in Less Developed Countries (LDCs) is at the cross-roads. The clamour for socialization of higher education in the face of large number of uncmployeci university graduates vis-a-vis dearth of adequate manpower to feed the development aciivities deserves consideration in a clearer perspectivc. The relatively high incidence of unemployment points out thc econotnic waste involved in using scarce resource. Moreover, for each occupation there is an optimum amount of formal schooling. Thus in some cases, labour productivity declines as schooling increases.
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- 2021
13. Guaranteed Rate of Return for Excess Investment in a Fuzzy Portfolio Analysis
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Chien-Liang Chiu, Yin-Yin Huang, and Ruey-Chyn Tsaur
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Rate of return ,Financial risk ,Computational intelligence ,02 engineering and technology ,Fuzzy logic ,Profit (economics) ,Theoretical Computer Science ,Computational Theory and Mathematics ,Artificial Intelligence ,0202 electrical engineering, electronic engineering, information engineering ,Econometrics ,Economics ,Portfolio ,020201 artificial intelligence & image processing ,Selection method ,Software ,Modern portfolio theory - Abstract
With increasing profit in securities investment, portfolio analysis has become a major topic for investors. We propose a fuzzy portfolio model as it is an efficient portfolio selection method associated with uncertain or vague returns. Although many researchers focus on studying the fuzzy portfolio model, they do not consider excess investment based on the selected guaranteed rates of return for some securities. To manage such an investment, a new fuzzy return function—where some securities are considered for excess investment based on the selected guaranteed rate of return—is introduced to improve the possibilistic mean and variance values, leading to a revised fuzzy portfolio model. Accordingly, to set certain securities for excess investment in the fuzzy return function, efficient portfolios for each selected guaranteed rate of return can be obtained under different levels of investment risk. Finally, we present a numerical example of a portfolio selection problem to illustrate the proposed model. This example shows that the expected rate of return of a lower guaranteed rate of return is larger than that of a higher guaranteed rate of return under different levels of investment risks. The portfolio analysis with some guaranteed rate of returns can provide more invested risk selection.
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- 2020
14. Indirect costs of adult pneumococcal disease and the productivity-based rate of return to the 13-valent pneumococcal conjugate vaccine for adults in Turkey
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Reiko Sato, Daria Burnes, Basak Hacibedel, Anubhav Agarwal, Jaypee Sevilla, Kerem Helvacioglu, Andrew Stawasz, and David E. Bloom
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economic evaluation ,Turkey ,Cost-Benefit Analysis ,costs ,Türkei ,Pneumococcal conjugate vaccine ,PCV13 Adult ,Pneumococcal Vaccines ,Indirect costs ,0302 clinical medicine ,Economics ,Impfung ,Immunology and Allergy ,030212 general & internal medicine ,Child ,health service ,health care economics and organizations ,Sozialwissenschaften, Soziologie ,Public economics ,Cost–benefit analysis ,Health Policy ,adult ,Vaccination ,illness ,Health technology ,vaccines ,Middle Aged ,health care ,Streptococcus pneumoniae ,Kosten ,Kosten-Nutzen-Analyse ,ddc:300 ,Gesundheitspolitik ,Krankheit ,Research Article ,Research Paper ,medicine.drug ,Adult ,Pneumococcal disease ,030231 tropical medicine ,Immunology ,Pneumococcal Infections ,Erwachsener ,03 medical and health sciences ,medicine ,Humans ,indirect costs ,Social sciences, sociology, anthropology ,Productivity ,Aged ,Pharmacology ,Rate of return ,Vaccines, Conjugate ,social rate of return ,Immunization Programs ,Gesundheitsversorgung ,cost-benefit analysis ,Gesundheitsleistung ,vaccination ,Economic evaluation ,EU-SILC ,PCV13 AdultM - Abstract
Productivity benefits of health technologies are ignored in typical economic evaluations from a health payer’s perspective, risking undervaluation. We conduct a productivity-based cost-benefit analysis from a societal perspective and estimate indirect costs of adult pneumococcal disease, vaccination benefits from the adult 13-valent pneumococcal conjugate vaccine (PCV13 Adult), and rates of return to PCV13 Adult for a range of hypothetical vaccination costs. Our context is Turkey’s funding PCV13 for the elderly and for non-elderly adults with select comorbidities within the Ministry of Health’s National Immunization Program. We use a Markov model with one-year cycles. Indirect costs from death or disability equal the expected present discounted value of lifetime losses in the infected individual’s paid and unpaid work and in caregivers’ paid work. Vaccination benefits comprise averted indirect costs. Rates of return equal vaccination benefits divided by vaccination costs, minus one. Input parameters are from public data sources. We model comorbidities’ effects by scalar multiplication of the parameters of the general population. Indirect costs per treatment episode of inpatient community-acquired pneumonia (CAP), bacteremia, and meningitis – but not for outpatient CAP – approach or exceed Turkish per capita gross domestic product. Vaccination benefits equal $207.02 per vaccination in 2017 US dollars. The rate of return is positive for all hypothetical costs below this. Results are sensitive to herd effects from pediatric vaccination and vaccine efficacy rates. For a wide range of hypothetical vaccination costs, the rate of return compares favorably with those of other global development interventions with well-established strong investment cases.
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- 2020
15. The Rate of Return on Everything
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Taylor, Alan M.
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Return on investment ,Economic policy ,Equality ,History ,Economists ,Savings ,Return on investment ,Business, general ,Business ,Economics - Abstract
Asset returns occupy a special place in the history of economic thought. From John Stuart Mill to Karl Marx, the profession's most influential thinkers have devoted much of their time [...]
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- 2018
16. Estimation of the rate of return to capital in the East African Community (EAC) Countries
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Glenn P. Jenkins and Abdallah Othman
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Rate of return ,Estimation ,Economics and Econometrics ,Variable (computer science) ,Capital investment ,Capital (economics) ,Key (cryptography) ,Economics ,East africa ,Monetary economics ,Real interest rate - Abstract
The real rate of return to capital plays a vital part in the economy in evaluating the contribution of capital investment to the economic growth. As it is also a key variable in estimating the econ...
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- 2020
17. The effects of macroeconomic factors on the rate of return of securities
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Kulanart Phutornkotara and Sakkarin Nonthapot
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Rate of return ,lcsh:Accounting. Bookkeeping ,Accounting ,Economics ,Pharmaceutical Science ,Monetary economics ,lcsh:HF5601-5689 ,Stock (geology) - Abstract
This study aims to study the macroeconomic factors that affect the rate of return of securities in the transport and service category of the Stock Exchange of Thailand. The category comprises three groups: media services, tourism, hotel and recreation and transport and logistics. The study employs quarterly data from 2001 to 2019 estimated with the ARDL bounds testing approach. The results reveal that media services, tourism, hotel and recreation and transport and logistics groups in the tourism and service category were cointegrated with stock exchange volume (in thousands of shares), exchange rate, gold bullion price, interest rate and diesel oil price. This study also found the long-term equilibriums of the macroeconomic factors deviated from the short-run to long run for three groups. The gold bullion price factor is a major factor in determining the long run. This study suggests that the gold bullion price is an alternative indicator for investment. Investors in the transport and logistics group should focus on the exchange rate, the gold bullion price, the interest rate and the diesel oil price before investment. Investors should consider the level of the exchange rate before investing in the media service group in the Stock Exchange of Thailand while investors in the tourism, hotel and recreation group of the Stock Exchange of Thailand should be recognize the stock exchange volume.
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- 2020
18. THE IMPACTS OF THE USDA BROADBAND LOAN AND GRANT PROGRAMS: MOVING TOWARD ESTIMATING A RATE OF RETURN
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Mitch Renkow and Ivan T. Kandilov
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Finance ,Program evaluation ,Receipt ,Rate of return ,Economics and Econometrics ,business.industry ,General Business, Management and Accounting ,Payroll ,Loan ,Broadband ,Per capita ,Economics ,Point estimation ,business - Abstract
In this article, we evaluate the rate of return to government efforts to promote broadband. Specifically, we estimate the impact of USDA's broadband loan and grant programs on the average payroll per worker using zip code level data from the Zip Code Business Patterns for the period from 1997 to 2007. Our results indicate that two of the smaller broadband programs (the Pilot loan program and the broadband grants program) likely had no effect on local payroll per workers. On the other hand, the largest program in terms of funding and coverage (the current broadband loan program) likely had a positive impact. Our estimate implies that a $1 per capita increase in a particular zip code's one‐time receipt of the current program broadband loan results in a $0.92 increase in payroll per worker annually. Our calculated point estimates of the benefit: cost ratios for this broadband program range from 1.98 to 2.99, depending on assumptions about the time frame over which benefits accrue. However, the confidence intervals are wide enough to include the possibility that the costs outweigh the benefits.(JEL L86, J30, O18)
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- 2019
19. A data set of comparable estimates of the private rate of return to schooling in the world, 1970–2014
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Claudio E. Montenegro and Harry Anthony Patrinos
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Data set ,Rate of return ,Organizational Behavior and Human Resource Management ,Earnings ,Management of Technology and Innovation ,Strategy and Management ,Economics ,Econometrics - Abstract
Purpose Young people experience lower employment, income and participation rates, as well as higher unemployment, compared to adults. Theory predicts that people respond to labor market information. For more than 50 years, researchers have reported on the patterns of estimated returns to schooling across economies, but the estimates are usually based on compilations of studies that may not be strictly comparable. The authors create a dataset of comparable estimates of the returns to education. Design/methodology/approach The data set on private returns to education includes estimates for 142 economies from 1970 to 2014 using 853 harmonized household surveys. This effort holds the constant definition of the dependent variable, the set of controls, sample definition and the estimation method for all surveys. Findings The authors estimate an average private rate of return to schooling of 10%. This provides a reasonable estimate of the returns to education and should be useful for a variety of empirical work, including critical information for youth. Originality/value This is the first attempt to bring together surveys from so many countries to create a global data set on the returns to education.
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- 2021
20. Estimate Private Rate of Return on Technical Vocation School and Formal School: Evidence from Kuwait
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Humoud A. Alqattan
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Rate of return ,Economics ,Demographic economics - Published
- 2020
21. Rate of return to schooling and business cycles
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Yanan Chen and Kyle A. Kelly
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Rate of return ,Economics and Econometrics ,050208 finance ,media_common.quotation_subject ,05 social sciences ,0502 economics and business ,Unemployment ,Business cycle ,Economics ,Unemployment rate ,Demographic economics ,sense organs ,050207 economics ,skin and connective tissue diseases ,media_common - Abstract
This paper examines the effects of the economic conditions – unemployment rate and unemployment change – on the rate of returns to schooling, as well as the effects on the gender difference in the ...
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- 2020
22. Connecting book rate of return to risk and return: the information conveyed by conservative accounting
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Xiao-Jun Zhang and Stephen H. Penman
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Rate of return ,050208 finance ,business.industry ,CONSERVATIVE ACCOUNTING ,education ,05 social sciences ,Accounting ,Risk–return spectrum ,050201 accounting ,RISK AND RETURN ,BOOK RATE OF RETURN, CONSERVATIVE ACCOUNTING, RISK AND RETURN ,BOOK RATE OF RETURN ,General Business, Management and Accounting ,humanities ,Corporate finance ,0502 economics and business ,Economics ,Capital asset pricing model ,Expected return ,Profitability index ,business ,health care economics and organizations ,Stock (geology) ,Public finance - Abstract
This paper revises the standard interpretation of the book rate of return as a measure of profitability. Rather, due to conservative accounting, the book rate of return informs about risk and the expected return to the investor. In contrast to asset pricing research, where the book rate of return is viewed as positively associated with risk and expected stock returns, the paper demonstrates the opposite: with the effect of conservative accounting, the book rate of return is negatively associated with risk and expected return. The empirical analysis indicates that the market prices equities accordingly. It also shows how the previously documented positive correlation is due to a misunderstanding of accounting and how the book rate of return enters into asset pricing in a way that is consistent with the accounting.
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- 2021
23. 'Systematic Risk-Excess Rate of Return using Jeonse Transaction Price Index in Apartment - Focused on Jeonse Transaction Price Index and Jeonse Actual Transaction Price Index -'
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Jaebum Jun and Kyeongkeun Lee
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Rate of return ,Index (economics) ,Apartment ,Transaction price ,Systematic risk ,Econometrics ,Economics ,Jeonse - Published
- 2021
24. The Cherry on the Cake is the Rate of Return
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Bernd Luderer
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Rate of return ,business.industry ,Financial economics ,Mathematical finance ,Economics ,business ,Effective interest rate ,Financial services ,Theme (narrative) - Abstract
The calculation of the rate of return or effective interest rate of financial products or financial investments is a recurrent theme in all areas of financial mathematics. The equivalence principle plays an important role here. Several examples illustrate the procedure for determining the rate of return.
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- 2021
25. A Theoretical Framework for Estimating the Rate of Return to a Pharmacy Education Anywhere
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Manuel J. Carvajal and Ioana Popovici
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Wages and salaries ,human-capital investment ,lcsh:RS1-441 ,Pharmacy ,030226 pharmacology & pharmacy ,Human capital ,Article ,lcsh:Pharmacy and materia medica ,03 medical and health sciences ,0302 clinical medicine ,Economics ,Pharmacology (medical) ,030212 general & internal medicine ,General Pharmacology, Toxicology and Pharmaceutics ,health care economics and organizations ,Rate of return ,education ,Actuarial science ,Cost–benefit analysis ,business.industry ,Investment (macroeconomics) ,pharmacist workforce ,Value (economics) ,wages and salaries ,Construct (philosophy) ,business ,rate of return - Abstract
Undertaking a pharmacy education is an investment in human capital. Candidates trade off present versus future costs and benefits. They make this investment with the expectation of earning enough income throughout their worklives to make their undertaking financially worthwhile. Whether or not this occurs is determined by the rate of return. The aim of the current study was to construct a theoretical model to estimate the rate of return to a pharmacy education investment. Specifications for model assumptions, inputs, and outputs are discussed. The outputs are the rates of return, the inputs are the costs and benefits of a pharmacy education, and the assumptions illustrate the circumstances of the individual or group for whom the model is built. The rate of return is the annual percentage that equates the streams of benefits and costs over the investment span. The higher the value of the rate of return to a pharmacy education is, the more profitable is the investment. This theoretical model may be used to estimate the financial viability of pharmacy and compare it to the viability of other professions or to the viability of pharmacy among various locations.
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- 2020
- Full Text
- View/download PDF
26. Liquidity and solvency of a company and the rate of return – an analysis of the Warsaw Stock Exchange
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Natalia Nehrebecka and Justyna Zalewska
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Rate of return ,Solvency ,050208 finance ,05 social sciences ,Financial ratio ,General Medicine ,Monetary economics ,Market liquidity ,Stock exchange ,Return on equity ,0502 economics and business ,Economics ,Capital asset pricing model ,050207 economics ,Modern portfolio theory - Abstract
The purpose of the article is to analyse the impact of various financial ratios used to evaluate a company’s liquidity and solvency on the rates of return on the shares of companies listed on the Warsaw Stock Exchange. In the context of developing countries, the relationship between liquidity and solvency on the one hand and the return on equity on the other is still not clear. Poland is the most economically developed country in Central and Eastern Europe. A thorough analysis is necessary to take appropriate action and introduce adequate regulations in the country, as well as to create the foundation for researching other economies in this region. In addition, this article includes new estimators that have not yet been taken into account but that may affect the rates of return, which will contribute to the literature on the subject and to the development of knowledge on the volatility of returns on shares. In the study, we have calculated the time-varying beta coefficients of the capital asset pricing model (CAPM) model and analysed portfolios based on three liquidity ratios and four solvency ratios, which were computed using the CAPM, Fama–French and Carhart models. The empirical study described in the article focuses on companies listed on the Warsaw Stock Exchange in the period from 1 January 1999 to 30 June 2013. Regressions were estimated by the least-squares method and by quantile regression. Based on the results, it was found that listed companies at risk of bankruptcy are able to meet their short-term liabilities. Liquidity and solvency measured by financial ratios significantly affect the sensitivity of the rate of return on shares to the risk factors expressed in the CAPM, Fama––French and Carhart models.
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- 2019
27. Inequality and the Rate of Return on Capital: An Institutional Approach to 'The Piketty Problem'
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Luke Petach
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Rate of return ,Economics and Econometrics ,Inequality ,media_common.quotation_subject ,05 social sciences ,Monetary economics ,General Business, Management and Accounting ,Institutional approach ,Economic inequality ,Capital (economics) ,0502 economics and business ,Economics ,050207 economics ,050205 econometrics ,media_common - Abstract
In Capital in the Twenty-First Century, Thomas Piketty (2014) explains growing income inequality via the difference between the rate of return on capital and the growth rate of the economy: the “r ...
- Published
- 2018
28. Average Internal Rate of Return
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Carlo Alberto Magni
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Pro forma ,Rate of return ,Economics ,Total income ,Internal rate of return ,Profitability index ,Monetary economics ,Discount points ,Database transaction ,Capital market - Abstract
We present the Average Internal Rate of Return (AIRR), which expresses the ratio of total income to total capital employed or, equivalently, the capital-weighted mean of the holding period rates. In particular, we show how to draw and use the (levered and unlevered) average ROI and the average ROE from the pro forma financial statements, how to assess the investors’ economic profitability (rate of return of the CFA stream) as distinguished from the equityholders’ economic profitability (rate of return of the CFE stream), and how to break down the project NPV into investment-period NPV and financing-period NPV whenever the project is a mixed transaction. We also present the notion of Economic AIRR and interpret it as representative of the project’s rate of return from the point of view of the capital market.
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- 2020
29. Rehabilitation of the Internal Rate of Return
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Nickolay Kulakov and Anastasia Blaset
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Capital budgeting ,Rate of return ,Actuarial science ,Loan ,media_common.quotation_subject ,Economics ,Internal rate of return ,Investment (macroeconomics) ,Investment performance ,Interest rate ,media_common - Abstract
The Internal Rate of Return (IRR) is a widely used investment performance measure. However, due to well-known pitfalls and wrong assumptions rather attributed than inherent in the IRR technique some experts on capital budgeting recommend either using the IRR rule very carefully or avoiding it entirely. The paper discusses the most significant pitfalls concerning the IRR in some cases appear to be common misconceptions, while the actual pitfalls are related to the NPV rather than the IRR. The paper affirms that: (i) if a project is conventional, the IRR being the NPV function root, is a rate of return or an interest rate and much better than any other modified IRR; (ii) irrelevant IRRs are due to an imperfection of the NPV method that should not be used for evaluating nonconventional projects; (iii) if a project is nonconventional the GNPV method should be used that is an extension of the NPV method from one to two different discount rates for investment and loan; (iv) the GIRR and GERR are rate of return and rate of cost for nonconventional project.
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- 2020
30. Accounting of the German Statutory Pension Scheme: Balance Sheet, Cross‐Sectional Internal Rate of Return and Implicit Tax Rate
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Christoph Metzger
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Scheme (programming language) ,Economics and Econometrics ,Pension ,Internal rate of return ,Monetary economics ,language.human_language ,Tax rate ,German ,Statutory law ,Accounting ,language ,Economics ,Balance sheet ,Fiscal sustainability ,computer ,Finance ,computer.programming_language - Published
- 2019
31. A Study on the Factors Influencing Rate of Return of New Stay REITs - Focusing on the Comparison with Rent-based REITs
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Sung-soo Koh and Jun-Hyung Kim
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Rate of return ,Capital structure ,Real estate investment trust ,Economics ,Monetary economics - Published
- 2019
32. Pricing flexibility under rate-of-return regulation: Effects on network infrastructure investment
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Matthew E. Oliver
- Subjects
Flexibility (engineering) ,Economics and Econometrics ,050208 finance ,Rate-of-return regulation ,05 social sciences ,Commodity ,Spot market ,Investment (macroeconomics) ,Commodity market ,Price-cap regulation ,0502 economics and business ,Network service ,Economics ,050207 economics ,Industrial organization - Abstract
When a commodity market relies upon a regulated network service industry—e.g., telecommunications, electricity, or natural gas transmission—economic efficiency in that commodity market is a crucial consideration for regulatory design. This is because insufficient infrastructure investment relative to network demand results in congestion. The extraction of associated rents has distortionary effects on commodity spot market prices. Greater regulatory flexibility in network pricing can alleviate such issues by cultivating the incentives needed for stakeholders to invest in transmission capacity. To illustrate this effect I derive and numerically solve stylized optimality conditions for access and usage prices for a gas pipeline operator under alternative regulatory models. My results have general implications for regulation in network infrastructure industries, as energy and telecommunications markets are expected to expand considerably over the coming decades.
- Published
- 2019
33. Property investment: gearing and the equity rate of return
- Author
-
Nick French
- Subjects
Rate of return ,Bank rate ,050208 finance ,Leverage (finance) ,Financial risk ,05 social sciences ,General Engineering ,Equity (finance) ,Downside risk ,Monetary economics ,General Business, Management and Accounting ,0502 economics and business ,Economics ,050207 economics ,General Economics, Econometrics and Finance ,Finance - Abstract
Purpose The purpose of this paper is to comment upon the relatively straightforward but often misunderstood role of gearing (or leverage) on the potential equity return of a property investment. Design/methodology/approach This education briefing is an explanation of the upside and downside risk of borrowing (at different levels) to successful investment. Findings The use of gearing can greatly enhance equity returns but at an increased risk. Practical implications The process of borrowing at a bank rate below the return rate on an investment project can increase the equity return of the project as long as all incomes and discount rate remain at appropriate levels. Originality/value This is a review of existing models.
- Published
- 2019
34. Economic Evaluation Method Based on Rate of Return for Multiple Investment Alternatives
- Author
-
Jin Wook Kim
- Subjects
Rate of return ,Economic evaluation ,Econometrics ,Economics ,Investment (macroeconomics) ,Net present value - Published
- 2019
35. The influence of holiday effect on the rate of return of emerging markets: a case study of Slovenia, Croatia and Hungary
- Author
-
Goran B. Anđelić, Marko Milošević, Slobodan Vidaković, and Vladimir Đaković
- Subjects
Rate of return ,Economics and Econometrics ,a.r.c.h ,Financial market ,Holiday effect ,rates of return ,A.R.C.H ,G.A.R.C.H ,risk ,investing ,Developing country ,g.a.r.c.h ,Monetary economics ,lcsh:Regional economics. Space in economics ,lcsh:HD72-88 ,lcsh:HT388 ,lcsh:Economic growth, development, planning ,Test (assessment) ,holiday effect ,Economics ,Emerging markets - Abstract
Taking into account the current trends and opportunities in the financial markets of developing countries, the subject of the research is to analyse, test and quantify the impact of the holiday effect on the daily return rates from investing activities for the observed financial markets of Slovenia, Croatia and Hungary. The aim of the research is to gain a concrete, empirically tested and quantified knowledge of the capabilities and effectiveness of autoregressive conditional heteroscedasticity (A.R.C.H.) and generalized autoregressive conditional heteroscedasticity (G.A.R.C.H.) models, in order to quantify the impact of the holiday effect on the rates of return from investing activities in the observed financial markets. The time period covered by the research is 2003–2016, where the length of the research time horizon makes possible model effectiveness testing in the periods before, during and after the global financial crisis. The methodology also includes S.I.C.–A.I.C. (Schwarz and Akaike) model selection criteria and a number of tests suitable for or adapted to the specific characteristics of financial markets in developing countries. The research results confirm the role and importance of the application of econometric models in order to quantify the risks of investing activities in the financial mar- kets of developing countries.
- Published
- 2019
36. Asset securitization and rate of return: A study on letters of guarantee
- Author
-
Binghui Wu
- Subjects
Statistics and Probability ,Rate of return ,050208 finance ,Actuarial science ,05 social sciences ,Internal rate of return ,Monetary economics ,Condensed Matter Physics ,Time-weighted return ,Order (exchange) ,0502 economics and business ,Economics ,Securitization ,Cash flow ,Arbitrage ,Asset (economics) ,050207 economics - Abstract
Using the theory of asset securitization, we analyze the feasibility of the securitization of letters of guarantee in theory. In the process of constructing the model of rate of return of securities backed by letters of guarantee, we propose two indices: the risk probability of asset-backed securities and the loss rate of asset-backed securities to analyze the cash flow of securities. On the basis of no arbitrage principle, the expression of rate of return of securities backed by letters of guarantee is put forward. In order to study the relationship between the rate of return of securities and other influential factor in the model, a simulation experiment is designed. The experiment results show that (i) an increasing risk probability of cash flow or a short maturity date also make the return rate of securities increase and (ii) the return rate of securities is higher in economic boom than that in economic recession when other parameters remain unchanged.
- Published
- 2018
37. A New Algorithm for Internal Rate of Return
- Author
-
David E. Vance
- Subjects
Capital budgeting ,General Engineering ,Econometrics ,Economics ,Internal rate of return ,Return on capital - Published
- 2018
38. Investment valuation and the performance of companies with modified internal rate of return: A simulation Markov chain
- Author
-
Shamsul Rijal Muhammad Sabri and Wajeeh Mustafa Sarsour
- Subjects
Valuation (logic) ,Markov chain ,Modified internal rate of return ,Economics ,Econometrics ,Investment (macroeconomics) - Published
- 2021
39. How Real Is Nominal? The Actual Rate of Return on a Principal
- Author
-
Ralf Korn and Bernd Luderer
- Subjects
Inflation ,Rate of return ,media_common.quotation_subject ,Capital (economics) ,Principal (computer security) ,Economics ,Monetary economics ,Computer Science::Operating Systems ,Physics::History of Physics ,media_common ,Interest rate - Abstract
In the real development of a capital one has to take into account not only the interest rate but also inflation, which is usually forgotten or simply not considered.
- Published
- 2021
40. Modified Internal Rate of Return
- Author
-
Mihai Mieila
- Subjects
050210 logistics & transportation ,021103 operations research ,Actuarial science ,Time-weighted return ,Modified internal rate of return ,0502 economics and business ,05 social sciences ,0211 other engineering and technologies ,Measure (physics) ,Economics ,Internal rate of return ,02 engineering and technology - Abstract
The evaluation of the efficiency of investments relies on a system of measures based on actuarial techniques that consider the time value of money. One of the common measures used is the Internal Rate of Return (IRR). Commonly, by applying of the efficiency evaluation criteria, result consistent outcomes. In this paper, the author tries to highlight that, based on its theoretical assumptions and practical drawbacks, considering of this measure in evaluation of the investments decisions may lead to erroneous decision. Despite the fact that the Internal Rate of Return (IRR) has never had a favorable academic press, the surveys outline that financial managers seem just to enjoy this measure. The aim of this paper is to summarize the drawbacks of this indicator and to offer a presentation of the Modified Internal Rate of Return (MIRR), as a solution to express a project performance by using of a percentage measure concomitant to discard the unrealistic assumption of reinvestment of cash flow stream just at the value of the IRR, allowing a straightforward calculation.
- Published
- 2017
41. Analyzing the returns and rate of return regulation of Finnish electricity distribution system operators 2015–2019
- Author
-
Mikael Collan, Emma Lilja, and Jyrki Savolainen
- Subjects
Electric power distribution ,General Energy ,business.industry ,Rate-of-return regulation ,Equity (finance) ,Econometrics ,Economics ,Distribution (economics) ,Transmission system operator ,Limiting ,Natural monopoly ,Management, Monitoring, Policy and Law ,business - Abstract
Electricity distribution prices have steeply increased in Finland since 2015. This research investigates the returns from the Finnish low-voltage electricity distribution business and compares them to returns from three European industry indices. The within-industry distribution of returns is also studied. The Finnish rate of return regulation model used is presented together with the level of allowed returns by the model, four changes to the model are proposed, and the effect of the four proposed changes on the returns allowed by the model are investigated. The results show that the returns of the Finnish DSOs are very high absolutely and comparatively. There is a ca. ten percent segment of the industry that is not very profitable, while ninety percent of the Finnish DSOs have high or very high returns. The proposed changes to the regulation model are shown to have a remarkable effect on the return level. A change limiting the return for equity only would bring down the return to a level that can typically be expected of a return from a natural monopoly company. The results are relevant to the ongoing process of legal and regulatory changes taking place in Finland and for decision-makers and regulators everywhere.
- Published
- 2022
42. The Determinants the Rate of Return on Deposits in Islamic Banks
- Author
-
Ahmad Al-Harbi
- Subjects
Rate of return ,Inflation ,Capital adequacy ratio ,Foreign ownership ,media_common.quotation_subject ,Economics ,Islam ,Deposit insurance ,Monetary economics ,Interest rate ,media_common ,Credit risk - Abstract
This study aims to identify the determinates of the rate of return on deposits in Islamic banks. The study, according to the best of my knowledge, is the first study to investigate the factors affecting the rate of return in Islamic banks using cross-country data with a large sample of banks and for a prolonged period. To achieve its aim, the author used data from almost all Islamic banks in the world for a 20-year period (1989-2008). The data were analyzed using a two-way fixed-effect model. The empirical results demonstrate that capital adequacy (default risk), credit risk, age, economic growth, and concentration significantly and negatively influenced the return on deposits in Islamic banks. The results also suggest that foreign ownership, size, inflation, and oil prices had significant and positive effects on the rate of return. Moreover, the results indicated that deposit insurance (positive), interest rates (positive), and deposit growth (negative) are not determinants of the rate of return in Islamic banks.
- Published
- 2020
43. A Fast and Parsimonious Way to Estimate the Implied Rate of Return on Equity
- Author
-
Dario Sanna
- Subjects
Rate of return ,Earnings yield ,Price–earnings ratio ,Goodwill ,Econometrics ,Economics ,Equity (finance) - Abstract
I propose a fast and parsimonious way to estimate the implied rate of return on common equity of single stocks and indexes, resulting from the combination of two easily computable ratios.
- Published
- 2020
44. Internal Average Rate of Return and Aggregate Return on Investment
- Author
-
Carlo Alberto Magni
- Subjects
Relative valuation ,Rate of return ,Scale (social sciences) ,Return on investment ,Value (economics) ,Aggregate (data warehouse) ,Econometrics ,Economics ,Cash flow ,Financial market efficiency - Abstract
We present the Internal Average Rate of Return (IARR), and the Aggregate Return on Investment (AROI). We show that AIRR, IARR, and AROI are three consistent approaches which are associated, respectively, with incomes, cash flows, and capitals. The three methodologies are logically equivalent; they produce the same value and the same decision. As a result, the analyst has a complete toolkit of approaches for appraising projects, conducting refined economic analyses, and making rational decisions. This unified theory, based on an explicit link between project scale and financial efficiency, provides a complete reconciliation between absolute valuation methods and relative valuation methods.
- Published
- 2020
45. Dynamical Internal Rate of Return for the Investment Project
- Author
-
Alexander Zhevnyak
- Subjects
Loan ,Capital (economics) ,Debt ,media_common.quotation_subject ,Value (economics) ,Econometrics ,Economics ,Internal rate of return ,Investment (macroeconomics) ,media_common - Abstract
A new indicator of profitableness (DIRR) of the investor and recipient of the investment project is proposed, which is a generalization and development of the concept of internal rate of return (IRR). It is formed in the form of the sum of the cost of the participant's capital and the project's own profitableness, which is determined by the ratio of NPV to the value of the aggregate discounted loan debts of the investor and the recipient accumulated in the project. In projects with multiple IRR value the indicator DIRR is described by a continuous function of discount rate and smoothes the gaps in the real operating profitableness indicator. For projects with a single (simple or multiple) value of IRR, there is a complete coincidence of DIRR with the real operating profitableness of the participant. An example of building a DIRR in a project with three simple and one double IRR values is considered.
- Published
- 2020
46. Time to retire the Internal Rate of Return as a project evaluation criterion!
- Author
-
M.M. Hajdasinski
- Subjects
Program evaluation ,Economics ,Internal rate of return ,Operations management - Published
- 2020
47. Finance: Internal Rate of Return
- Author
-
William G. Albrecht
- Subjects
Economics ,Internal rate of return ,Monetary economics - Published
- 2020
48. China's investment and rate of return on capital revisited
- Author
-
Xun Zhang, Jianguo Xu, and Ya Tang
- Subjects
Rate of return ,Economics and Econometrics ,050208 finance ,Modified internal rate of return ,Financial economics ,05 social sciences ,Internal rate of return ,Return of capital ,Time-weighted return ,0502 economics and business ,Absolute return ,Economics ,Holding period return ,050207 economics ,Investment performance ,Finance - Abstract
We revisit China's suspected overinvestment problem by examining the rate of return on capital from two perspectives. First, we find that two existing methods of estimating the rate of return generate conflicting results, and we succeed in reconciling them. Our revised estimates show that the rate of return rose sharply from 1998 to 2014, which helps explain the strong investment drive. Second, we explore what caused the rate of return to rise. We find the explanation lies mainly with the long-term factor of rising total factor productivity but that the short-term cyclical factor of low real interest rates has also contributed.
- Published
- 2017
49. Reflecting on Contemporary India's Rising Inequality: Does Differential Rate of Return to Education Matter?
- Author
-
Sudip Chakraborty
- Subjects
Rate of return ,Labour economics ,Inequality ,business.industry ,media_common.quotation_subject ,Wage ,Differential (mechanical device) ,Inclusive growth ,Human capital ,Economic inequality ,Economics ,General Earth and Planetary Sciences ,business ,Tertiary sector of the economy ,General Environmental Science ,media_common - Abstract
India's rising income inequality to large extent is caused by the enormous difference in learning outcomes after completion of education. Decomposition analysis of India's current state of inequality points out that rural income inequality causes this outcome. The interstate difference in mean income and the urban-rural gap of mean income within states are often held responsible for giving rise to India's current state of income inequality. Intra-state income inequality is no less responsible. Non-farm sector has been expanding rapidly and within that category service sector is expanding. Service sector works need skills in various trades. Thus, unskilled and semi-skilled workers are left out in this new pattern. Formal employment is also characterized by duel wage structure. Income disparity or earning differential has its roots embedded in education delivery system in particular and human capital formation in general. The state must create opportunities for growth for all through provisioning of universal quality education and healthcare.
- Published
- 2018
50. Forecasting rate of return after extreme values when using AR- t -GARCH and QAR-Beta- t -EGARCH
- Author
-
Szabolcs Blazsek, Daniela Carrizo, Humberto Gonzalez, and Ricardo Eskildsen
- Subjects
Rate of return ,Index (economics) ,Financial economics ,Autoregressive conditional heteroskedasticity ,0502 economics and business ,05 social sciences ,Econometrics ,Economics ,050207 economics ,Extreme value theory ,Beta (finance) ,Finance ,050205 econometrics - Abstract
We compare the predictive performances of AR- t -GARCH and recent QAR-Beta- t -EGARCH models. We compare predictive performances for those days when an extreme value is observed, and also for the trading day after each day when an extreme value is observed. We use a historical dataset from the adjusted Dow Jones Industrial Average (DJIA) index. We assume that the forecast users of this study are DJIA options investors. We find that AR- t -GARCH dominates QAR-Beta- t -EGARCH on each day when an extreme value is observed, and QAR-Beta- t -EGARCH dominates AR- t -GARCH on the trading day after each day when an extreme value is observed.
- Published
- 2018
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