Auditing as a Signal in Small Business Lending

This paper models the borrowing decision of a small firm seeking a bank loan when it can optionally hire, at a cost, an independent external auditor to convey its risk characteristics to lenders. The analysis shows that a necessary condition for a potential borrower to prefer having an audit to not having an audit is that the borrower’s debt to equity ratio must be above a certain minimum cut-off value. For observed audit cost functions, this cut-off debt-equity ratio is higher for smaller initial size firms. Such firms will forego an audit even if they are of low risk, and potentially face loan denial and higher interest rate. Additionally, the cutoff debt-equity ratio is an increasing function of audit cost. Hence smaller audit costs may allow more high quality small firms to reveal their types to the banks, thus leading to a more partially separating equilibrium. The model suggests a number of interesting empirical questions for further study

Enron: Corporate Fiascos and Their Implications

While other books on this infamous scandal have focused on the personalities involved, Enron: Corporate Fiascos and Their Implications presents Enron as the quintessential case study of corporate greed. Utilizing essays written by leading scholars and experts in the corporate and legal fields, this text examines the causes and consequences of Enron’s failure from business, financial, legal and ethical viewpoints. Enron: Corporate Fiascos and Their Alternatives details the lessons to be learned, and includes sections on Enron and the Business World, Enron and The Legal Environment and Enron and Ethics.https://scholars.law.unlv.edu/books/1014/thumbnail.jp

The Long-Run Negative Drift of Post-listing Stock Returns.

After firms move trading in their stock to the American or New York Stock Exchanges, stock returns are generally poor. Although many listing firms issue equity around the time of listing, postlisting performance is not entirely explained by the equity issuance puzzle. Similar to the conclusions regarding other long-run phenomena, poor postlisting performance appears related to managers timing their application for listing. Managers of smaller firms, where initial listing requirements may be more binding, tend to apply for listing before a decline in performance. Poor postlisting performance is not observed in larger firms. Copyright 1995 by American Finance Association.

Algoristics for Single-Machine Sequencing with Precedence Constraints

Although Horn, Sidney and Lawler have considered the problem of minimizing weighted mean flow time for n jobs with precedence constraints on one machine, practical exact algorithms for the general case remain elusive. Two relatively sophisticated heuristics are presented which are computationally attractive. Each is optimal on large subclasses of problems; computational study demonstrates each to be extremely close to optimal in general. Such heuristics are dubbed "algoristics." The first-come first-served heuristic serves as a benchmark. Finally, a simple "myopic" heuristic produces about 80% of the savings of the algoristics; it possesses the advantages of a dispatching rule. A standard branch and bound procedure has also been computed for a large subset of problems for comparison purposes. Planning horizon results are also derived.

Reading and notes on financial accounting: issues and contraversies/ Zeff

xvii, 782 hal.: Ill.; 24 cm

Enron and Other Corporate Fiascos: The Corporate Scandal Reader

This law school text explores the Enron debacle from a variety of different aspects. Essays analyze the business-government interactions and decisions that laid the foundations for Enron\u27s growth and subsequent demise. Other essays describe and detail the complex web of partnerships and accounting tricks used by Enron to hide bad news and project good news. While other essays focus on the ethical and legal dimensions of the Enron crisis, and their lessons for business and law students, as well as for society.https://scholars.law.unlv.edu/books/1011/thumbnail.jp

GOLBALIZATION, CORPORATE FINANCE, AND THE COST OF CAPITAL

International financial markets are progressively becoming one huge, integrated, global capital market-a development that is contributing to higher stock prices in developed as well as developing economies. For companies that are large and visible enough to attract global investors, having a global shareholder base means having a lower cost of capital and hence a greater equity value for two main reasons: 1999 Morgan Stanley.