Investment And Financing Decisions Of Private And Public Firms
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| Author | : Wolfgang Drobetz |
| Publisher | : |
| Total Pages | : 55 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
We study the differences in the allocation of cash flow between Western European private and public firms. Public firms have a significantly higher investment-cash flow sensitivity than comparable private firms. These differences in investment-cash flow sensitivities are not due to more stringent financial constraints of public firms. Instead, our results suggest an agency-based explanation, since differences in investment-cash flow sensitivities can only be observed for the unexpected portion of firms' cash flow. These findings are driven by firms from countries with low ownership concentration and liquid stock markets, where shareholders have lower incentives to monitor managers and rather sell their shares when discontent. Our study adds a new aspect to the ongoing debate on the effect of a stock market listing on a firm's investment decisions.
| Author | : Paul Butzen |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 354 |
| Release | : 2003-01-01 |
| Genre | : Business & Economics |
| ISBN | : 9781781956335 |
This book provides coherent theoretical and empirical analysis of firms’ investment and financing decisions. It assesses the role of uncertainty, financial imperfections, corporate governance and taxation. Evidence is obtained using several unique and high quality microeconomic data-sets, which explore features seldom addressed.
| Author | : H. Kent Baker |
| Publisher | : John Wiley & Sons |
| Total Pages | : 504 |
| Release | : 2011-03-31 |
| Genre | : Business & Economics |
| ISBN | : 1118022947 |
A comprehensive guide to making better capital structure and corporate financing decisions in today's dynamic business environment Given the dramatic changes that have recently occurred in the economy, the topic of capital structure and corporate financing decisions is critically important. The fact is that firms need to constantly revisit their portfolio of debt, equity, and hybrid securities to finance assets, operations, and future growth. Capital Structure and Corporate Financing Decisions provides an in-depth examination of critical capital structure topics, including discussions of basic capital structure components, key theories and practices, and practical application in an increasingly complex corporate world. Throughout, the book emphasizes how a sound capital structure simultaneously minimizes the firm's cost of capital and maximizes the value to shareholders. Offers a strategic focus that allows you to understand how financing decisions relates to a firm's overall corporate policy Consists of contributed chapters from both academics and experienced professionals, offering a variety of perspectives and a rich interplay of ideas Contains information from survey research describing actual financial practices of firms This valuable resource takes a practical approach to capital structure by discussing why various theories make sense and how firms use them to solve problems and create wealth. In the wake of the recent financial crisis, the insights found here are essential to excelling in today's volatile business environment.
| Author | : Gordon M. Phillips |
| Publisher | : |
| Total Pages | : 69 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
We exploit Medicare national coverage reimbursement approvals as a quasi-natural experiment to investigate how the financing decisions of private and publicly traded firms respond to changes in investment opportunities. We find that publicly traded companies increase their external financing, and their subsequent product introductions, by more than private companies in response to national coverage approvals. The primary source of the increased financing is through private equity financing of public firms. We show that the stock characteristics of publicly traded firms, such as liquidity and price informativeness, and product market competition are important factors in explaining their financing advantage.
| Author | : Mr.Omotunde E. G. Johnson |
| Publisher | : International Monetary Fund |
| Total Pages | : 31 |
| Release | : 1990-12-01 |
| Genre | : Business & Economics |
| ISBN | : 1451939167 |
Firms in developing countries that seek outside financing for investment must often choose their debt-equity combinations in the face of financial market constraints on debt service, on outside equity financing, and on internal finance (endowments). Inefficiencies in the allocation of available finance and in the equity-debt choices that can ensue can be prevented by appropriate policy measures to improve information on profitable investment opportunities and about firms; to directly strengthen financial intermediation; and to support appropriate credit guarantee schemes.
| Author | : Gordon Martin Phillips |
| Publisher | : |
| Total Pages | : 51 |
| Release | : 2014 |
| Genre | : Corporations |
| ISBN | : |
We exploit Medicare national coverage reimbursement approvals of medical devices as a quasi-natural experiment to investigate how private and publicly traded firm financing decisions and product introductions respond to exogenous changes in investment opportunities. We find that publicly traded companies increase their external financing, and their subsequent product introductions, by more than private companies in response to national coverage approvals. The primary source of the increased financing is through private financing of public firms. We also show that firms that select to go public during our sample period are ex ante more productive than similar private firms. The results are consistent with public firms bearing the costs of going public to gain financing advantages that come from being able to offer securities with better exit liquidity and lower price risk.
| Author | : Paul Butzen |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 0 |
| Release | : 2003 |
| Genre | : Capital investments |
| ISBN | : 9781843763994 |
This text provides coherent theoretical and empirical analysis of firms' investment and financing decisions. It assesses the role of uncertainty, financial imperfections, corporate governance and taxation using evidence derived from microeconomic data sets. indeed financially constrained, for fixed investment as well as for R&D projects. The free cash-flow hypothesis holds, that is, managers divert excess funds away for their own interests, but less so in closely controlled companies. In accordance with the real option theory, the results suggest that uncertainty leads firms to adopt a wait and see strategy which eventually reduces investment, especially for irreversible investment. Corporate governance features are shown to affect managers, discipline and companies' restructuring plans. Finally, different tax reforms are evaluated, and an alternative tax structure that would stimulate growth is proposed.
| Author | : Federico Beltrame |
| Publisher | : Springer Nature |
| Total Pages | : 150 |
| Release | : 2023-08-22 |
| Genre | : Business & Economics |
| ISBN | : 3031380894 |
Corporate finance plays a vital role in every business as it pertains to an array of financing and investment decisions. Where most corporate finance books provide tools for public companies, this book presents new approaches and methods for planning and valuing private firms. Chapters discuss how typical valuation methods may not be perfectly adaptable to private firms and their investment decisions: in particular showing how the widely used Capital Asset Pricing Model cannot be precisely applied for the estimation of cost of equity for private companies, and the limitations of market multiples which may not match individual company features. The book suggests new ways of financial forecasting that can be better tailored to private businesses, such as by exploiting the concept of financial breakeven based on debt serviceability that departs from the more traditionally used concept of the revenue-cost breakeven. Topics including financial planning, working capital management, the cost of capital, and valuation methods are all covered. This book will be of interest to consultants, analysts and accountants working in private firms, as well as academics and students who are interested in an empirical assessment of the role of corporate finance in private businesses versus larger public companies.
| Author | : Robert T. Slee |
| Publisher | : John Wiley & Sons |
| Total Pages | : 640 |
| Release | : 2011-04-12 |
| Genre | : Business & Economics |
| ISBN | : 1118075455 |
Praise for Private Capital Markets Valuation, Capitalization, and Transfer of Private Business Interests SECOND EDITION "In the years since publication of the first edition of Private Capital Markets, the concepts and ideas that it presents have been widely accepted by progressive members of the business valuation community. Now with the Second Edition, author Rob Slee has included empirical data on capital markets for midsized businesses. This book remains a must for everyone involved in appraising, buying, selling, or financing privately owned businesses." Raymond C. Miles, founder, The Institute of Business Appraisers "The Graziadio School of Business has used the Private Capital Markets book for several years with great success. This course, along with the Pepperdine Private Capital Markets Survey project, has helped our students better prepare for careers in middle market companies." Linda Livingstone, Dean of the Graziadio School of Business and Management, Pepperdine University "Our international association of independent M&A professionals recommends this text as the most comprehensive foundation for understanding the private capital marketplace. This book is essential reading for middle market M&A advisors, investors, and other decision-makers in the private capital markets." Mike Nall, founder, Alliance of M&A Advisors A practical road map for making sound investment and financing decisions based on real experiences and market needs Now fully revised and in a second edition, Private Capital Markets provides lawyers, accountants, bankers, estate planners, intermediaries, and other professionals with a workable framework for making sound investment and financing decisions based on their own needs and experiences. This landmark resource covers: Private business valuation Middle market capital sources The business ownership transfer spectrum And much more Private Capital Markets, Second Edition surveys the private capital markets and presents the proven guidance you need to navigate through these uncharted waters.
| Author | : Anne-Kristin Rademacher |
| Publisher | : GRIN Verlag |
| Total Pages | : 30 |
| Release | : 2013-04-29 |
| Genre | : Business & Economics |
| ISBN | : 3656422419 |
Research Paper (undergraduate) from the year 2013 in the subject Business economics - Investment and Finance, grade: 1,3, University of Applied Sciences Essen, language: English, abstract: The paper on hand aims at analyzing the financial model private equity from participants’ point of view. The introduction has shown the importance for the overall economy. Questions of the paper are: what are the criteria for successful investments for both parties; what are the advantages respectively difficulties from the perspectives of investors and issuers of private equity? In order to systematically approach the questions the author first provides the fundamentals of the concept. In a second step benefits and risks for the participants in private equity investments will be described. A simultaneous assessment of these will result in an overview reflecting potential profits and losses. The analysis focusses on theoretical descriptions; practical applications will not be considered. Information and data gathering is based on secondary literature.
