Application of the Modigliani–Miller Theory, Modified for the Case of Advance Payments of Tax on Profit, in Rating Methodologies

During a couple years we have suggested a new approach to rating methodology of non–financial issuers, as well for project rating. The key factors of a new approach are: 1) The adequate use of discounting of financial flows virtually not used in existing rating methodologies, 2) The incorporation of rating parameters (financial "ratios") into the modern theory of capital structure (Brusov–Filatova–Orekhova (BFO) theory) and into its perpetuity limit. Recently we have generalized the Modigliani and Miller theory for a more realistic method of payments of tax on profit: for the case of advance payments of tax on profit, which is widely used in practice. Modigliani – Miller theory accounts these tax payments as annuity–immediate, while in practice these payments are making in advance and thus should be accounting as annuity–due. We have shown that this generalization leads to some important consequences, which change seriously all the main statements by Modigliani and Miller. In current paper we use the modified Modigliani – Miller theory (MMM theory) and apply it for rating methodologies needs. A serious modification of MMM theory in order to use it in rating procedure has been required. The financial "ratios" were incorporated into MMM theory. The dependence of the weighted average cost of capital (WACC), which plays the role of discount rate, on coverage and leverage ratios is analyzed.  Obtained results make possible to use the power of this theory in the rating and create a new base for rating methodologies

Modification of the Modigliani–Miller Theory for the Case of Advance Payments of Tax on Profit

The first serious study (and first quantitative study) of influence of capital structure of the company on its indicators of activities was the work by Nobel Prize Winners Modigliani and Miller. Their theory has a lot of limitations. One of the most important and seriouse assumptions of the Modigliani – Miller theory is that all financial flows as well as all companies are perpetuity. This limitation was lift out by Brusov–Filatova–Orekhova in 2008 (Filatova et al. 2008), who have created BFO theory – modern theory of capital cost and capital structure for companies of arbitrary age.  Despite the fact that the Modigliani–Miller theory is currently a particular case of the general theory of capital cost and capital structure – Brusov–Filatova–Orekhova (BFO) theory – it is still widely used at the West. In current paper we discuss one more limitation of Modigliani – Miller theory: a method of tax on profit payments. Modigliani – Miller theory accounts these payments as annuity–immediate while in practice these payments are making in advance and thus should be accounted as annuity–due. We generalize the Modigliani–Miller theory for the case of advance payments of tax on profit, which is widely used in practice, and show that this leads to some important consequencies, which change seriously all the main statements by Modigliani and Miller. These consequencies are as following: WACC starts to depend on debt cost kd, WACC turns out to be lower than in case of classical Modigliani–Miller theory and thus company capitalization becomes higher than in ordinary Modigliani–Miller theory.We show that dependence of equity cost on leverage level L is still linear, but the tilt angle with respect to L–axis turns out to be smaller: this could lead to modification of the divident policy of the company. Correct account of a method of tax on profit payments demonstrates that shortcomings of Modigliani – Miller theory are dipper, than everybody suggested: the underestimation of WACC really turns out to be bigger, as well as overestimation of the capitalization of the company. This means that systematic risks arising from the use of modified Modigliani – Miller theory (MMM theory) (which is more correct than "classical' one) in practice are higher than it was suggested by the "classical" version of this theory

Spin dynamics of a trapped spin-1 Bose Gas above the Bose-Einstein transition temperature

We study collective spin oscillations in a spin-1 Bose gas above the Bose-Einstein transition temperature. Starting from the Heisenberg equation of motion, we derive a kinetic equation describing the dynamics of a thermal gas with the spin-1 degree of freedom. Applying the moment method to the kinetic equation, we study spin-wave collective modes with dipole symmetry. The dipole modes in the spin-1 system are found to be classified into the three type of modes. The frequency and damping rate are obtained as functions of the peak density. The damping rate is characterized by three relaxation times associated with collisions.Comment: 19 pages, 5 figur

Critical points in edge tunneling between generic FQH states

A general description of weak and strong tunneling fixed points is developed in the chiral-Luttinger-liquid model of quantum Hall edge states. Tunneling fixed points are a subset of `termination' fixed points, which describe boundary conditions on a multicomponent edge. The requirement of unitary time evolution at the boundary gives a nontrivial consistency condition for possible low-energy boundary conditions. The effect of interactions and random hopping on fixed points is studied through a perturbative RG approach which generalizes the Giamarchi-Schulz RG for disordered Luttinger liquids to broken left-right symmetry and multiple modes. The allowed termination points of a multicomponent edge are classified by a B-matrix with rational matrix elements. We apply our approach to a number of examples, such as tunneling between a quantum Hall edge and a superconductor and tunneling between two quantum Hall edges in the presence of interactions. Interactions are shown to induce a continuous renormalization of effective tunneling charge for the integrable case of tunneling between two Laughlin states. The correlation functions of electronlike operators across a junction are found from the B matrix using a simple image-charge description, along with the induced lattice of boundary operators. Many of the results obtained are also relevant to ordinary Luttinger liquids.Comment: 23 pages, 6 figures. Xiao-Gang Wen: http://dao.mit.edu/~we

Double heavy meson production through double parton scattering in hadronic collisions

It is shown that the contribution from double parton scattering to the inclusive double heavy meson yield is quite comparable with the usually considered mechanism of their production at the LHC energy. For some pairs of heavy flavored quarks in the final state the double parton scattering will be a dominant mode of their production.Comment: 5 pages, version accepted in Phys. Lett. B, discussion extended, references adde

Finite SU(N)^k Unification

We consider N=1 supersymmetric gauge theories based on the group SU(N)_1 x SU(N)_2 x ... x SU(N)_k with matter content (N,N*,1,...,1) + (1,N,N*,...,1) + >... + (N*,1,1,...,N) as candidates for the unification symmetry of all particles. In particular we examine to which extent such theories can become finite and we find that a necessary condition is that there should be exactly three families. We discuss further some phenomenological issues related to the cases (N,k) = (3,3), (3,4), and (4,3), in an attempt to choose those theories that can become also realistic. Thus we are naturally led to consider the SU(3)^3 model which we first promote to an all-loop finite theory and then we study its additional predictions concerning the top quark mass, Higgs mass and supersymmetric spectrum.Comment: 15 page

The Narrative Frame of Daniel: A Literary Assessment

This paper presents a fuzzy multicriteria group decision making approach for evaluating and selecting information systems projects. The inherent subjectiveness and imprecision of the evaluation process is modeled by using linguistic terms characterized by triangular fuzzy numbers. A new algorithm based on the concept of the degree of dominance is developed to avoid the complex and unreliable process of comparing fuzzy numbers usually required in fuzzy multicriteria decision making. A multicriteria decision support system is proposed to facilitate the evaluation and selection process. An information systems project selection problem is presented to demonstrate the effectiveness of the approach

Global Search for New Physics with 2.0/fb at CDF

Data collected in Run II of the Fermilab Tevatron are searched for indications of new electroweak-scale physics. Rather than focusing on particular new physics scenarios, CDF data are analyzed for discrepancies with the standard model prediction. A model-independent approach (Vista) considers gross features of the data, and is sensitive to new large cross-section physics. Further sensitivity to new physics is provided by two additional algorithms: a Bump Hunter searches invariant mass distributions for "bumps" that could indicate resonant production of new particles; and the Sleuth procedure scans for data excesses at large summed transverse momentum. This combined global search for new physics in 2.0/fb of ppbar collisions at sqrt(s)=1.96 TeV reveals no indication of physics beyond the standard model.Comment: 8 pages, 7 figures. Final version which appeared in Physical Review D Rapid Communication

Observation of Orbitally Excited B_s Mesons

We report the first observation of two narrow resonances consistent with states of orbitally excited (L=1) B_s mesons using 1 fb^{-1} of ppbar collisions at sqrt{s} = 1.96 TeV collected with the CDF II detector at the Fermilab Tevatron. We use two-body decays into K^- and B^+ mesons reconstructed as B^+ \to J/\psi K^+, J/\psi \to \mu^+ \mu^- or B^+ \to \bar{D}^0 \pi^+, \bar{D}^0 \to K^+ \pi^-. We deduce the masses of the two states to be m(B_{s1}) = 5829.4 +- 0.7 MeV/c^2 and m(B_{s2}^*) = 5839.7 +- 0.7 MeV/c^2.Comment: Version accepted and published by Phys. Rev. Let

An Integrated TCGA Pan-Cancer Clinical Data Resource to Drive High-Quality Survival Outcome Analytics

For a decade, The Cancer Genome Atlas (TCGA) program collected clinicopathologic annotation data along with multi-platform molecular profiles of more than 11,000 human tumors across 33 different cancer types. TCGA clinical data contain key features representing the democratized nature of the data collection process. To ensure proper use of this large clinical dataset associated with genomic features, we developed a standardized dataset named the TCGA Pan-Cancer Clinical Data Resource (TCGA-CDR), which includes four major clinical outcome endpoints. In addition to detailing major challenges and statistical limitations encountered during the effort of integrating the acquired clinical data, we present a summary that includes endpoint usage recommendations for each cancer type. These TCGA-CDR findings appear to be consistent with cancer genomics studies independent of the TCGA effort and provide opportunities for investigating cancer biology using clinical correlates at an unprecedented scale. Analysis of clinicopathologic annotations for over 11,000 cancer patients in the TCGA program leads to the generation of TCGA Clinical Data Resource, which provides recommendations of clinical outcome endpoint usage for 33 cancer types