Turnovsky (1995) derives in a continuous-time model of a decentralized economy that the correct specification of the firm's objective function is to maximize the initial value of its outstanding securities. The firm value is the discounted flow of real earnings. For the discrete-time version of...

Residual income models provide an important theoretical link between equity valuation and financial statement variables. While various researchers have developed models of how accounting policy impacts on the structure of these models, empirical support for these models is at best weak and...

This note surveys the classic firm-valuation methods and provides a comparison of the strengths and weaknesses of the various approaches. It is meant to be used as a convenient technical reference and supplement to cases emphasizing firm valuation

The value of a levered firm depends to a large extent upon the value of the tax shields. The German Corporate Tax Reform Act 2008 changes the tax system dramatically and introduces a new ceiling for the tax-deduction of interest payments. A central objective of this reform has been the tax...

We performed a comprehensive analysis on the price bounds of CDO tranche options, and illustrated that the CDO tranche option prices can be effectively bounded by the joint distribution of default time (JDDT) from a default time copula. Systemic and idiosyncratic factors beyond the JDDT only...

We find a highly significant hump shaped relation between Tobin's Q and CEO share ownership for firms under weak external governance (EG), but find no relation for firms under strong EG. These relations illustrate the substitution effect of EG and CEO ownership in mitigating agency problems at...

The German reform on taxation 2008 introduced a restriction of the deductibility of interest expenses to a ceiling of 30% of the EBITDA. This paper shows that the plain probability of reaching this ceiling depresses the value of the tax shield by an option that has a path dependent and recursive...

This paper examines the determinants of the outcomes of the default recovery process. We find that a new variable that incorporates not only the percentage of debt more senior to the debt instrument, but also debt at the same rank, is the most important factor driving the recovery rate. It is...

Purpose: Assess the value and risks of Disney's 2009 $4 billion acquisition of the Marvel Entertainment Group (Marvel) in a case study utilizing the modern Graham and Dodd valuation approach.Design/methodology/approach: Presents a detailed valuation of Marvel in 2009 drawing on previously...

In response to the UK Intellectual Property Office’s call for views on Artificial Intelligence and Intellectual Property, this paper by the Oxford Intellectual Property Research Centre addresses the impact of artificial intelligence (AI) on exceptions in copyright law. Response focus on...