This article explores the behavior of the stock market in Colombia with the information given by the Bolsa de Bogota Index (Indice de la Bolsa de Bogota, IBB). The index is analyzed from January, 1930 to December, 1998. The inflation rate covers the same period; the inflation rate as measured by...

Este documento resume 1.502 respuestas a una encuesta por e-mail realizada a directivos de empresas, a analistas y a profesores de universidad. Los resultados más relevantes de la encuesta son: 1) gran dispersión de las repuestas (los profesores utilizan primas entre 3 y 8%, los analistas...

This paper derives a tax-adjusted discount rate formula with a constant proportion leverage policy, investor taxes, and risky debt. The result depends on an assumption about the treatment of tax losses in default. We identify the assumption that justifies the textbook approach of discounting...

Corporations in many countries are run by controlling shareholders whose cash flow rights in the firm are substantially smaller than their control rights. This separation of ownership and control allows the controlling shareholders to pursue private benefits at the cost of minority investors by...

We consider a general model for an investment producing a single commodity, and, assuming that there exists a traded asset spanning the corresponding market, we prove a "verification theorem" which relates the solution of an appropriate differential equation with the investment's contingent...

The most important asset pricing models consider that an investor’s utility function is completely defined by mean and variance, which requires the normality of the stock’s return distribution (or that stock returns are not skewed). However, not all stocks or markets have normal returns...

En 2008, la rentabilidad de la bolsa española fue -40%, sólo hubo tres empresas (entre 136) con rentabilidad positiva y 61 empresas tuvieron una rentabilidad inferior a -50%. Las 136 empresas destruyeron valor para sus accionistas por importe de 420 millardos de euros. Ha sido un año con gran...

This paper shows that a decision maker using the CAPM for valuing firms and making decisions may contradict Modigliani and Miller’s Proposition I, if he adopts the widely-accepted disequilibrium NPV. As a consequence, CAPM-minded agents employing this NPV are open to arbitrage losses and miss...

Using theories from the behavioral finance literature to predict that investors are attracted to industries with more salient outcomes and that therefore firms in such industries have higher valuations, we find that firms in industries that have high industry-level dispersion of profitability...

The notion of Net Present Value (NPV) is thought to formally translate the notion of economic profit, where the discount rate is the cost of capital. The latter is the expected rate of return of an equivalent-risk alternative that the investor might undertake and is often found by making...