Search

Podjetja za doseganje kratkoročnih in dolgoročnih ciljev pripravijo več investicijskih projektov. Pred implementacijo vsakega projekta je potrebno oceniti, ali bo skozi svojo ekonomsko dobo prinašal dobiček. Vodstvo podjetja med različnimi projekti preveri, kateri izmed njih bo najbolj dobičkonosen. V diplomski nalogi smo obravnavali primer ocenjevanja investicije, kjer smo uporabili statične in dinamične metode. Ugotovili smo, da ima na ekonomski izkupiček projekta največji vpliv obrestovanje vezanega denarja v investicijo. Pri določitvi tveganja investicije je priporočljivo upoštevati izračune obeh metod. To achieve short and long-term goals, companies prepare several investment projects. Before carrying out any project, it is necessary to assess whether it will generate profit during its economic life. The management of the company checks between various projects to find the most profitable one. In this thesis we discussed the case of investment appraisal, where we used static and dynamic methods. We found that the interest on time-bound investment has the greatest impact on the economic outcome of the project. When determining investment risks, it is recommended to use both calculation methods.

Household financial decisions are complex, interdependent, and heterogeneous, and central to the functioning of the financial system. We present an overview of the rapidly expanding literature on household finance (with some important exceptions) and suggest directions for future research. We begin with the theory and empirics of asset market participation and asset allocation over the life cycle. We then discuss household choices in insurance markets, trading behavior, decisions on retirement saving, and financial choices by retirees. We survey research on liabilities, including mortgage choice, refinancing, and default, and household behavior in unsecured credit markets, including credit cards and payday lending. We then connect the household to its social environment, including peer effects, cultural and hereditary factors, intra-household financial decision making, financial literacy, cognition and educational interventions. We also discuss literature on the provision and consumption of financial advice.

Regulatory support for transmission investment by private investors follows a complex process of dialogue, information sharing, commitments, and incentives. Whilst this process has attracted substantial research, the formulation of efficient solutions still remains an open question and this has become more complex with the emergence of new intermittent and battery-storage resources. We propose an optimal incentive solution in which the private transmission company earns congestion rents and an incentive fee, set by agreement with the regulator. This fee is set in the context of assessing the impact of current and future generation resources (conventional, intermittent, and batteries) on the congestion rents. The welfare-optimizing solution follows from a mixed integer, nonlinear, bilevel optimization problem, which is computationally challenging. We re-cast the problem for tractability and devise a disjunctive-based decomposition algorithm. Its performance has been successfully demonstrated on two standard IEEE case studies.

This study investigates how companies adjusted their investments in key strategic resources—i.e., their workforce, capital expenditures, R&D, and CSR—in response to the sharp increase in the cost of credit (the “credit crunch”) during the financial crisis of 2007-2009. We compare companies whose long-term debt matured shortly before versus after the credit crunch to obtain (quasi-)random variation in the extent to which companies were hit by the higher borrowing costs. We find that companies that were adversely affected followed a “two-pronged” approach of curtailing their workforce and capital expenditures, while maintaining their investments in R&D and CSR. We further document that firms that followed this two-pronged approach performed better post-crisis.

Relying on gender-role congruity theory, this paper investigates the relationship between the gender of the top management teams of venture philanthropy firms and their business risk-taking orientation. The research also assesses if and how experience moderates this relationship. Using a combination of survey data to capture the venture philanthropy firm’s risk orientation and biographical data to identify managers’ gender and experience, it finds that only gender affects business risk-orientation in these firms. Surprisingly, this is the opposite direction than expected, whereby teams with a higher proportion of women have a higher risk-taking profile. This suggests the need to revise the applicability of gender role congruity theory, the existence of a gender-bind dilemma, and the relevance of context in venture philanthropy.

This study provides descriptive evidence on how firms respond to activist short seller reports and how these responses are associated with outcomes for the targeted firms. We show that the frequency of these reports has grown substantially in recent years. Although we find that firms respond only 31% of the time, this rate increases substantially when the report is accompanied by significantly negative abnormal returns and when the report contains new evidence. Not responding is associated with a less negative stock price response at report release and fewer adverse outcomes. Firms that launch internal investigations following the report release have significantly higher subsequent rates of stock exchange delisting and SEC enforcement actions, and lower rates of being acquired. Overall, our results highlight the impact of activist short sellers on target firms and that firm responses are associated with material outcomes.

The article is devoted to solving the scientific problem of developing theoretical provisions and providing methodological and applied recommendations for improving approaches to economic assessment and substantiation of engineering projects of construction enterprises. The relevance of scientific research is due to the need to implement a large-scale program for updating the technical and technological base of most domestic enterprises based on replacing outdated types of equipment, technologies and models of construction production management, as well as improving methodological approaches to organizing and managing an enterprise. A significant amount of work on the development and implementation of these measures can be carried out by specialized organizations - engineering firms. However, the feasibility of purchasing their services by construction companies requires a preliminary justification through the development of appropriate engineering projects. Cost engineering as a complex solution to the Customer's problems is indeed a topical product that will increasingly be in demand on the market. Especially in the current conditions, when the key task for any company is to reduce costs, both during the construction phase and during the operation of the facility. The cost engineering of investment and construction projects is closely related to the concepts: project risk management, complex project cost management (TCM - total cost management). Integrated project management can use all methods and tools of value engineering, such as technology audit, price audit, earned value methodology, etc., Статтю присвячено вирішенню наукового завдання розроблення теоретичних положень та надання методико-прикладних рекомендацій з удосконалення підходів до економічного оцінювання та обґрунтування інжинірингових проєктів будівельних підприємств. Актуальність наукового дослідження обумовлена необхідністю реалізації широкомасштабної програми оновлення техніко-технологічної бази більшості вітчизняних підприємств на засадах заміни застарілих видів обладнання, технологій та моделей управління будівельним виробництвом, а також вдосконалення методичних підходів організації та управління підприємством. Значний обсяг робіт з розроблення і впровадження цих заходів можуть здійснити спеціалізовані організації – інжинірингові фірми. Проте доцільність придбання будівельними підприємствами їх послуг потребує попереднього обґрунтування шляхом розроблення відповідних інжинірингових проєктів. Вартісний інжиніринг як комплексне рішення завдань Замовника дійсно є актуальним продуктом, який все більше буде затребуваний ринком, особливо в нинішніх умовах, коли для будь-якої компанії ключовим завданням є скорочення витрат як на етапі будівництва, так і при експлуатації об'єкта. Вартісний інжиніринг інвестиційно-будівельних проєктів тісно пов'язаний з поняттями: управління ризиками проєкту, комплексне управління вартістю проєктів (TCM – total cost management). При комплексному управлінні проєктом можуть використовуватися всі методики і інструменти вартісного інжинірингу, такі як технологічний аудит, ціновий аудит, методика освоєного обсягу та ін.

This paper assesses the economic benefits of 57 World Bank Group-sponsored hydropower dam plant investments. Hydropower dams are among the main sources for producing electricity and the largest renewable source for power generation throughout the world. Hydropower dams are often a lower-cost option for power generation in Clean Energy Transition for addressing global climate change. Despite its conspicuous aspects, constructing hydropower dams has been controversial. Considering the World Bank's long history as the largest hydropower development financier, this study investigates its performance in supporting hydropower dams. The outcomes of this study apply to the wider hydropower development community. Of the projects in this study, 70% experienced a cost overrun, and more than 80% of projects experienced time overruns, incurring potential additional costs as a result. Despite the high cost and time overruns, this hydropower portfolio of dams produced a present value of net economic benefits by 2016 of over half a trillion USD. Based on our findings, the evaluated hydropower portfolio helped avoid over a billion tonnes of CO2 for an estimated global environmental benefit valued at nearly USD 350 billion. The projects' additional environmental benefits raise the real rate of return from 15.4% to 17.3%. The implication for hydropower developers is that the projects' assessment should consider cost and time overrun and factor them into the project-planning contingency scenarios. There is a considerable benefit for developing countries to exploit their hydropower resources if they can be developed according to industry practices and international standards. The case for developing hydropower may be stronger when considering its climate benefits. The net economic benefits of hydropower can be even higher if there is a greater effort to manage cost and time overruns.

Value investing involves buying securities that appear cheap relative to some fundamental anchor. For equity investors, that anchor is typically a measure of intrinsic value linked to financial statements. Recently, much has been written about the death of value investing. Although undoubtedly many approaches to value investing have suffered recently, the authors find the suggestion that value investing is dead to be premature. Both from a theoretical and empirical perspective, expectations of fundamental information have been and continue to be an important driver of security returns. The authors also address critiques leveled at value investing and find them generally lacking in substance. TOPICSAnalysis of individual factors/risk premia, factor-based models, fundamental equity analysis Key Findings ▪ The authors address a series of possible (ex post) rationalizations of the recent underperformance of value strategies. They find little empirical evidence or theoretical foundation to support the criticisms. ▪ Building on prior academic research, the authors find strong evidence that fundamental information is relevant for stock prices. ▪ However, the authors find that there are periods in which stock prices become less connected to fundamental information; when value underperforms significantly, it is primarily attributable to a widening gap between prices and fundamentals.

Using the first reported case of COVID-19 in a given U.S. county as the event day, we find that firms headquartered in an affected county experience, on average, a 27-bps lower return in the 10-day post-event window. This negative effect nearly doubles in magnitude for firms in counties with a higher infection rate (−50 bps). We test a number of transmission channels. Firms belonging to labor-intensive industries and those located in counties with a large mobility decline have worse stock performance. Firms sensitive to COVID-19-induced uncertainty also exhibit more negative returns. Finally, more negative stock returns are associated with downward revisions in earnings forecasts.

Are female founders penalized when raising funds for their ventures based on industry served? Across an observational study conducted on ventures seeking funding (*N*=392) and an experimental study conducted on investors allocating venture funding (*N*=130), we find significant evidence for a “lack of fit” effect: First, we document that female-led ventures receive significantly less funding at significantly lower valuations while retaining significantly smaller equity amounts than male-led ventures. Next, we demonstrate that female founders of ventures catering to male-dominated industries receive significantly less funding at significantly lower valuations with significantly reduced equity retention than female founders of ventures catering to female-dominated industries, while male founders attain similar funding outcomes regardless of the gender dominance of the industry to which they cater. Lastly, we confirm this is because investors perceive significantly lower degrees of fit between founding CEO and venture for female-led ventures catering to male- as opposed to female-dominated industries (with no fit differences for male-led ventures across industries). Degree of investor sophistication emerges as a potential attenuating factor, appearing to help reduce gender bias from perceived lack of fit.

We examine the economic determinants and consequences associated with the inclusion of covenants with similar levels of restrictiveness in bond contracts. Using a unique Moody’s bond covenant dataset, we develop measures that capture similarity in the restrictiveness of bond covenants relative to previously issued peer bonds. We document that the demand for similarity by issuers, their advisors and bond investors follows the predictions of sociological and economic theories. Further, consistent with similarity in covenants reducing bond investors’ information acquisition and processing costs, we show that bonds with more similar covenant restrictiveness receive lower yields at issuance. These bonds are also more likely to be held by long-term bond investors, such as insurance companies, and are characterized by greater liquidity in the secondary market, providing a partial explanation for the lower bond yields. Our results highlight the benefits of covenant similarity and suggest that the use of covenants with similar restrictiveness levels brings information acquisition and processing cost savings that may be larger than the monitoring benefits provided by covenants with more tailored features.

Using a novel pairwise measure of firms’ acquisition of rivals’ disclosures, we show that investment opportunities drive interfirm information flows. We find that these flows predict subsequent mergers and acquisitions as well as how and how much firms invest, relative to rivals. Moreover, firms’ use of rivals’ information often hinges on the similarities of their products. Our results suggest that rivals’ public information, far from being unusable, helps facilitate investment and product decisions, including acquisitions and product differentiation strategies. The findings also support a learning mechanism that could partly underlie the emerging literature on peer investment effects.

Investment appraisal methods based on real options are gaining popularity in academia, while the adoption by practitioners is still infrequent. Having in mind practitioners, the method is designed to be: conceptually easy to understand, based on realistic hypotheses and data available, able to provide quantitative indications and strategic guidelines. The method is based on a systematic simulation of several scenarios generated according to exercise thresholds of relevant investment parameters. An exercise threshold gives to the investors the exercise right of taking some decision, for instance building a power plant. An exercise threshold is therefore a rule to decide whether to exercise or not a certain option on the basis of the values of one or more state variables. Consequently, the probability distribution of the Net Present Value (or analogous indicator) of the investment is a function of the state variables and the exercise threshold. Systematically changing the exercise thresholds allow to (A) establishing the “real option value” and (B) calculate relevant indications about when and on which type of plant to invest. The method is presented in detail and applied to a case study assessing the investment appraisal of: coal plant, gas plant, large nuclear reactor and small modular reactor.

Extensive research has explored the style exposures of actively managed equity funds. We conducted an exhaustive set of return-based and holdings-based analyses to understand actively managed credit funds. We found that credit long–short managers tend to have high passive exposure to the credit risk premium. In contrast, we found that long-only managers that focus on high-yield credits provide less exposure to the credit risk premium than do their respective benchmarks. For both credit hedge funds and long-only credit mutual funds, we found that neither has economically meaningful exposures to well-compensated systematic factors.

Typically, the economic analysis of Renewable Energy Projects (REP) has been assessed considering Classical Methodologies of Investment Analysis (CMIA) in which only a few set of indicators are included, highlighting the Payback, Net Present Value and Internal Rate of Return. This excessive reliance on CMIA has been criticized because it neglects managerial flexibility, and it may end up leading to the project's undervaluation. This paper attempts firstly, to identify and describe the complementarity among economic evaluation methodologies for REP. Secondly, a novel framework is proposed for conducting the economic analysis to help decision-makers in identifying the most suitable methodology before proceeding with the investment. The findings of the study suggest that CMIA may be suitable for the cases of projects presenting low volatility. However, the analysis should be supplemented by a new set of indicators for projects with medium or high volatility. The Multi-Index Methodology (MIM), the Extended Multi-Index Methodology (EMIM) and the Real Options Analysis (ROA) are proposed to increase the investors' perception towards both the project's profitability and risk and to account for flexibility. The application of the proposed framework is demonstrated for the case of a Small Hydropower Plant (SHP) investment project. The outcomes of this paper also include the opportunities for decision-makers to flexibly respond to changes in the business and economic market using the proposed conceptual framework., This work is supported by the National Council for Scientific and Technological Development (CNPq), Brazil. This work has been supported by FCT-Fundacao para a Ciencia e Tecnologia within the R&D Units Project Scope: UIDB/00319/2020.

Una investigación descriptiva fue conducida para determinar las prácticas de presupuesto de capital de las empresas de hospedaje asociadas a la Cámara Departamental de Hotelería de Santa Cruz, en Bolivia. Los resultados mostraron que el 42,42% de las empresas nunca había utilizado alguna técnica de presupuesto de capital, y que el 63,64% nunca había determinado un costo de capital para los flujos de efectivo. Las empresas con frecuencia soslayaban a la etapa estratégica de control en el presupuesto de capital. También, las consideraciones a la flexibilidad gerencial fueron notadas en las empresas, a pesar de la poca utilización del enfoque de las opciones reales. Teniendo en cuenta los avances recientes en la teoría sobre el presupuesto de capital, se evidenció una importante brecha entre la teoría y la práctica en el sector hotelero boliviano. A descriptive investigation was conducted to determine the capital budgeting practices of the lodging firms affiliated with the Cámara Departamental de Hotelería de Santa Cruz, in Bolivia. The results showed that the 42.42% of the firms had never used any of the capital budgeting techniques, and that the usage of a discount rate for the long-term cash flows was missing in 63.64% of the firms. Most of these companies ignored the control stage in capital budgeting. In addition, the considerations to the value of managerial flexibility were noted in the firms, although the minority adopted the real options approach to appraise their investment proposals. Considering the recent development of the scientific literature regarding capital budgeting, these findings suggest the existence of an important gap between the theory and practice in the Bolivia’s hospitality industry.

This study presents a field experiment we conducted in which media articles for a random sample of firms with earnings announcements are promoted to a one percent subset of Yahoo Finance users. The promoted firms have similar fundamental and earnings-news characteristics as control firms, yet we find that promoted firms have higher abnormal returns on the day of the earnings announcement, and some evidence of lower bid-ask spreads. Moreover, these results are more pronounced for less visible firms, negative earnings news, and on days with fewer promoted firms. We do not find evidence of significant increases in trading volume, or of information acquisition by users subject to the promotion. These findings suggest that investor attention affects the pricing of earnings and that retail investors buy stocks that catch their attention, in a setting where attention is randomly assigned.

Over the last few years, a lot of press, pundit, and political attention has been paid to share repurchases, much of it critical. Most repurchase critics assert that share repurchases are at historical highs and that dollars spent repurchasing shares would otherwise be directed toward profitable investment. Some also credit recent stock market gains to the “sugar high” of share repurchases. The authors show that most of these criticisms are without merit (at least, merit that can be demonstrated), sometimes glaringly so. Aggregate share repurchase activity has not been at historical highs when measured properly, and when netted against debt issuance it is almost a non-event: It does not mechanically create earnings growth, does not stifle aggregate investment activity, and has not been the primary cause for recent stock market strength. These myths should be discarded.

Style investing has become part of the investing nomenclature for equity markets. To date, despite the massive size of fixed-income markets, little research has examined the efficacy of style-based investing in fixed income. In this article, the authors summarize a common style-based framework for capturing excess returns for both government and corporate bonds. Importantly, from an investor perspective, these style-based excess returns are highly diversifying with respect to the classic risk premiums in fixed-income markets (i.e., term premium and credit risk premium) and exhibit low macroeconomic sensitivities.

To reduce the Sulphur emission from shipping and ensure clean shipping, a number of Sulphur Emission Control Areas (SECA) were enforced in special areas around the globe. From 2015, in SECA, ship owners are not allowed to use fuel with more than 0.1% Sulphur content. One of the major concerns for the SECA regulation is that maritime stakeholders have had to take into consideration the costs as well as the tolerable risks of their compliance investment options. Besides that, low freight rates have increased the competition and had caused financial pressure on ship owners so that lower capital reserves and low credibility levels limit the manoeuvring space for investment activities. The indications from BSR after 2015 showed that the low fuel price has eased the economic effects of the SECA regulation and as a result, most ship owners have delayed their investment decisions. Even though the postponement of emission abatement techniques seems to have reduced the compliance expenses for SECA, they, however, did not improve the position of shipowners relative to their competitors. Consequently, new policy instruments to stimulate innovation, to raise competitiveness and to comply with the new environmental regulations are needed. It would have been easier to hedge fuel price volatility and offer maritime logistics services for a lower price, but to be able to ensure sustainable results in long-term, maritime stakeholders must be ready to device astute strategies that can propel them to unparalleled advantage. This research first appraised the investment risks and payback period associated with the scrubber using different capital budgeting methods. It further illustrated the Maritime Energy Contracting (MEC) model as a market mechanism for the delivery of a cost-effective emission reduction using the scrubber technology as well as an instrument to realise a competitive advantage for ship operators. The results are empirically validated by case studies from BSR.