Whether corporate diversification decreases or increases the risk of the diversifying firm is an important empirical question. We investigate this issue using a sample of diversifying acquisitions and various risk measures. We find that corporate diversification tends to decrease the risk of...

Intro -- Equity Asset Valuation -- Contents -- Foreword -- Preface -- Acknowledgments -- About the CFA Institute Investment Series -- Chapter 1 Equity Valuation: Applications & Processes -- Learning Outcomes -- 1. Introduction -- 2. Value Definitions and Valuation Applications -- 2.1. What Is...

A considerable amount of research has been devoted to why R2 differs across firms or markets, although little attention has been paid to the consequences of this difference. We fill this gap by investigating how differing R2 affects investors' assessment of firm value. Using a sample of 90,111...

The BP Deepwater Horizon drilling rig exploded on April 20, 2010, leading to an unprecedented environmental and financial disaster. This paper details responses in the financial markets for BP securities, including stock, bonds, options, and credit default swaps. Following the disaster BP shares...

This paper presents option-pricing solutions to the inventory-stocking problem when demand is distributed discretely or continuously. The model readily incorporates inventory salvage values and stockout costs, and shows that option-pricing models can be used to determine the optimal stocking...