Required Rates of Return for Corporate Investment Appraisal in the Presence of Growth Opportunities

Traditional methods of estimating required rates of return overstate hurdle rates in the presence of growth opportunities. We attempt to quantify this effect by developing a simple model which: (i) identifies those companies that have valuable growth opportunities; (ii) splits the value of shares into 'assets-in-place' and 'growth opportunities'; and (iii) splits the equity β into β for 'assets-in-place' and 'growth opportunities'. We find growth opportunities for UK companies over the 1990–2004 period to average 33% of equity value. Incorporating the effect of growth opportunities, the average cost of capital for investment purposes falls by 1.1 percentage points

Capital structure and its determinants in the United Kingdom – a decompositional analysis

Prior research on capital structure by Rajan and Zingales (1995) suggests that the level of gearing in UK companies is positively related to size and tangibility, and negatively correlated with profitability and the level of growth opportunities. However, as argued by Harris and Raviv (1991), 'The interpretation of results must be tempered by an awareness of the difficulties involved in measuring both leverage and the explanatory variables of interest'. In this study the focus is on the difficulties of measuring gearing, and the sensitivity of Rajan and Zingales' results to variations in gearing measures are tested. Based on an analysis of the capital structure of 822 UK companies, Rajan and Zingales' results are found to be highly definitional-dependent. The determinants of gearing appear to vary significantly, depending upon which component of debt is being analysed. In particular, significant differences are found in the determinants of long- and short-term forms of debt. Given that trade credit and equivalent, on average, accounts for more than 62% of total debt, the results are particularly sensitive to whether such debt is included in the gearing measure. It is argued, therefore, that analysis of capital structure is incomplete without a detailed examination of all forms of corporate debt

Testing for inconsistencies in the estimation of UK capital structure determinants

This article analyses the determinants of the capital structure of 1054 UK companies from 1991 to 1997, and the extent to which the influence of these determinants are affected by time-invariant firm-specific heterogeneity. Comparing the results of pooled OLS and fixed effects panel estimation, significant differences in the results are found. While the OLS results are generally consistent with prior literature, the results of our fixed effects panel estimation contradict many of the traditional theories of the determinants of corporate financial structure. This suggests that results of traditional studies may be biased owing to a failure to control for firm-specific, time-invariant heterogeneity. The results of the fixed effects panel estimation find larger companies to have higher levels of both long-term and short-term debt than do smaller firms, profitability to be negatively correlated with the level of gearing, although profitable firms tend to have more short-term bank borrowing than less profitable firms, and tangibility to positively influence the level of short-term bank borrowing, as well as all long-term debt elements. However, the level of growth opportunities appears to have little influence on the level of gearing, other than short-term bank borrowing, where a significant negative relationship is observed

The betaine/GABA transporter and betaine: roles in brain, kidney, and liver

The physiological roles of the betaine/GABA transporter (BGT1; slc6a12) are still being debated. BGT1 is a member of the solute carrier family 6 (the neurotransmitter, sodium symporter transporter family) and mediates cellular uptake of betaine and GABA in a sodium- and chloride- dependent process. Most of the studies of BGT1 concern its function and regulation in the kidney medulla where its role is best understood. The conditions here are hostile due to hyperosmolarity and significant concentrations of NH4Cl and urea. To withstand the hyperosmolarity, cells trigger osmotic adaptation, involving concentration of a transcriptional factor TonEBP/NFAT5 in the nucleus, and accumulate betaine and other osmolytes. Data from renal cells in culture, primarily MDCK, revealed that transcriptional regulation of BGT1 by TonEBP/NFAT5 is relatively slow. To allow more acute control of the abundance of BGT1 protein in the plasma membrane, there is also post-translation regulation of BGT1 protein trafficking which is dependent on intracellular calcium and ATP. Further, betaine may be important in liver metabolism as a methyl donor. In fact, in the mouse the liver is the organ with the highest content of BGT1. Hepatocytes express high levels of both BGT1 and the only enzyme that can metabolize betaine, namely betaine:homocysteine –S-methyltransferase (BHMT1). The BHMT1 enzyme removes a methyl group from betaine and transfers it to homocysteine, a potential risk factor for cardiovascular disease. Finally, BGT1 has been proposed to play a role in controlling brain excitability and thereby represents a target for anticonvulsive drug development. The latter hypothesis is controversial due to very low expression levels of BGT1 relative to other GABA transporters in brain, and also the primary location of BGT1 at the surface of the brain in the leptomeninges. These issues are discussed in detail

The valuation of European financial firms

We extend the recent literature concerning accounting based valuation models to investigate financial firms from six European countries with substantial financial sectors: France, Germany, Italy, Netherlands, Switzerland and the UK. Not only are these crucial industries worthy of study in their own right, but unusual accounting practices, and inter-country differences in those accounting practices, provide valuable insights into the accounting-value relationship. Our sample consists of 7,714 financial firm/years observations from 1,140 companies drawn from 1989-2000. Sub-samples include 1,309 firm/years for banks, 650 for insurance companies, 1,705 for real estate firms, and 3,239 for investment companies. In most countries we find that the valuation models work as well or better in explaining cross-sectional variations in the market-to-book ratio for financial firms as they do for industrial and commercial firms in the same countries, although Switzerland is an exception to this generalization. As expected, the results are sensitive to industrial differences, accounting regulation and accounting practices. In particular, marking assets to market value reduces the relevance of earnings figures and increases that of equity

Decoupling management inefficiency: Myopia, hyperopia and takeover likelihood

Using combinations of accounting and stock market performance measures, we advance a comprehensive multidimensional framework for modelling management performance. This framework proposes “poor” management, “myopia”, “hyperopia” and “efficient” management, as four distinct attributes of performance. We show that these new attributes align with, and extend, existing frameworks for modelling management short-termism. We apply this framework to test the management inefficiency hypothesis using UK data over the period 1988 to 2017. We find that takeover likelihood increases with “poor” management and “myopia”, but declines with “hyperopia” and “efficient” management. Our results suggest that managers who focus on sustaining long-term shareholders' value, even at the expense of current profitability, are less likely to be disciplined through takeovers. By contrast, managers who pursue profitability at the expense of long-term shareholder value creation are more likely to face takeovers. Finally, we document the role of bidders as enforcers of market discipline

Information about bank intangibles, analyst information intermediation, and the role of knowledge and social forces in the ‘market for information’

Although developments in the sell-side analyst literature have revealed the role of intellectual capital (IC) in analysts’ work, the whole information intermediation progress of IC remains a “black box”. This paper develops an analyst information intermediation model, illustrating how ‘soft’ information changes through analyst acquisition, processing and disclosure of information. Bourdieu’s ideas of habitus, field and capital are used to develop our explanation of the analyst information intermediation model. We argue that the combination of empirical evidence and theoretical explanation provides a new and more comprehensive way to improve understanding of the role of analysts within knowledge and social contexts

Peroxynitrite Inhibits Glutamate Transporter Subtypes

The reuptake of glutamate in neurons and astrocytes terminates excitatory signals and prevents the persistence of excitotoxic levels of glutamate in the synaptic cleft. This process is inhibited by oxygen radicals and hydrogen peroxide (H2O2). Here we show that another biological oxidant, peroxynitrite (ONOO-), formed by combination of superoxide (O2-) and nitric oxide (NO), potently inhibits glutamate uptake by purified or recombinant high affinity glutamate transporters reconstituted in liposomes. ONOO- reduces selectively the Vmax of transport; its action is fast (reachingor = 90% within 20 s), dose-dependent (50% inhibition at 50 microM), persistent upon ONOO- (or by product) removal, and insensitive to the presence of the lipid antioxidant vitamin E in the liposomal membranes. Therefore, it likely depends on direct interaction of ONOO- with the glutamate transporters. Three distinct recombinant glutamate transporters from the rat brain, GLT1, GLAST, and EAAC1, exhibit identical sensitivity to ONOO . H2O2 also inhibits reconstituted transport, and its action matches that of ONOO- on all respects; however, this is observed only with 5-10 mM H202 and after prolonged exposure (10 min) in highly oxygenated buffer. NO, released from NO donors (up to 10 mM), does not modify reconstituted glutamate uptake, although in parallel conditions it promotes cGMP formation in synaptosomal cytosolic fraction. Overall, our results suggest that the glutamate transporters contain conserved sites in their structures conferring vulnerability to ONOO- and other oxidants

Gaming the FTSE 100 Index

TesisLima NorteEscuela de PosgradoReforma y Modernización del EstadoLa presente investigación titulada: Calidad del servicio en la satisfacción del usuario de consulta externa en una Red del Ministerio Salud, en el año 2019, tuvo como objetivo general determinar la incidencia de la calidad del servicio en la satisfacción del usuario de consulta externa en una Red del Ministerio Salud, en el año 2019. Los instrumentos que se utilizaron fueron cuestionarios en escala de Likert para las variables. Estos instrumentos fueron sometidos a los análisis respectivos de confiabilidad y validez, que determinaron que los cuestionarios tienen validez y confiabilidad. El método empleado fue el hipotético deductivo, el tipo de investigación fue básica, nivel correlacional causal, de enfoque cuantitativo; diseño no experimental de corte transversal. La población estuvo formada por 650 usuarios atendidos en el área de consulta externa en una Red del Ministerio Salud y el muestreo fue de tipo probabilístico. La técnica empleada para recolectar información fue la encuesta y los instrumentos de recolección de datos fueron cuestionarios que fueron debidamente validados a través de juicios de expertos y su confiabilidad a través del estadístico de fiabilidad Alfa de Cronbach el resultado fue de ,823 para la variable calidad del servicio, se evidencia que tiene una fuerte confiabilidad y para la variable satisfacción del usuario tuvo un resultado de ,918, por lo que, se puede manifestar que dicha variable tiene una alta confiabilidad. Los coeficientes presentan valores significativos, mayores al 17.2% de incidencia de la calidad de servicio que es explicada por la variable incluida en la satisfacción; habiéndose obtenido un p-value igual a 0,000