Valuing Loss Firms

We hypothesize that when confronted with a loss, investors price earnings conditional on the expected probability of the firm's return to profitability. We show a parsimonious model of one year-ahead loss reversal is useful in predicting the firm's return to profitability. Using the estimated probabilities of loss reversal to define samples of persistent (low probability of reversal) and transitory (high probability of reversal) losses, we show the pricing of losses, as well as their characteristics, varies as a function of their expected probability of reversal. We document a more pronounced stock price response to a transitory loss consistent with investors assessing the likelihood of exercising the abandonment option to be smaller. We also find the market responds negatively to persistent losses, especially in the latter part of the sample period. We also show the results are consistent with investors pricing the components of losses differently depending on the type of loss: they value only the aggregate accruals component of persistent losses and only the aggregate cash flow component of transitory losses. Further analysis shows the result for persistent losses relates to the presence of an increasingly larger R&D component that investors price negatively as if rewarding firms that make larger R&D outlays with larger returns. One consequence of the presence of a growing R&D component implies persistent losses become a weaker indicator of the likelihood of exercising the abandonment option

Triple GEM Detectors for the Forward Tracker in STAR

Future measurements of the flavor-separated spin structure of the proton via parity-violating W boson production at RHIC require an upgrade of the forward tracking system of the STAR detector. This upgrade will allow the reconstruction of the charge sign of electrons and positrons produced from decaying W bosons. A design based on six large area triple GEM disks using GEM foils produced by Tech-Etch Inc. has emerged as a cost-effective solution to provide the necessary tracking precision. We report first results from a beam test of three test detectors using Tech-Etch produced GEM foils and a laser etched two dimensional strip readout. The detectors show good operational stability, high efficiency and a spacial resolution of around 70 um or better, exceeding the requirements for the forward tracking upgrade. The influence of the angle of incidence of the particles on the spatial resolution of the detectors has also been studied in detail.Comment: 5 pages, 8 figures, presented at the IEEE Nuclear Science Symposium in Honolulu, HI, USA, October 27 - November 3, 200

Beam Performance of Tracking Detectors with Industrially Produced GEM Foils

Three Gas-Electron-Multiplier tracking detectors with an active area of 10 cm x 10 cm and a two-dimensional, laser-etched orthogonal strip readout have been tested extensively in particle beams at the Meson Test Beam Facility at Fermilab. These detectors used GEM foils produced by Tech-Etch, Inc. They showed an efficiency in excess of 95% and spatial resolution better than 70 um. The influence of the angle of incidence of particles on efficiency and spatial resolution was studied in detail.Comment: 8 pages, 9 figures, accepted by Nuclear Instruments and Methods in Physics Research

Verification and Validation of the RAGE Hydrocode in Preparation for Investigation of Impacts into a Volatile-rich Target

Before a hydrocode is used to investigate a question of scientific interest, it should be tested against analogous laboratory experiments and problems with analytical solutions. The Radiation Adaptive Grid Eulerian (RAGE) hydrocode[1], developed by Los Alamos National Laboratory (LANL) and Science Applications International Corporation (SAIC)[2,3] has been subjected to many tests during its development.[4,5] We extend and review this work, emphasizing tests relevant to impact cratering into volatile-rich targets