New Venture Opportunity Cost of Capital and Financial Contracting

Investments in new ventures involve financial contracts between an entrepreneur and outside investors. Investors, such as venture capital firms, represent well-diversified investors. In contrast, the entrepreneur must commit a substantial fraction of human and financial capital to the venture. Consequently, the entrepreneur's required rate of return depends on total risk, in the context of the entrepreneur’s other assets. In this paper, we use the Capital Asset Pricing Model as an approximation of the asset pricing model used by well-diversified investors. Accordingly, the entrepreneur faces the risk-return tradeoff of the CAPM as the opportunity cost of holding an under-diversified portfolio that includes investment in the venture. We model the required rate of return of the entrepreneur, assuming investment in the venture is one of two assets in the portfolio and that the other is the market portfolio. We explore opportunities for value creation when the parties to a financial contract have different costs of bearing risk. We also present empirical data on factors relevant to new venture cost of capital estimation.

The SEC's "Fair Value" Standard for Mutual Fund Investment in Restricted Shares and Other Illiquid Securities

Mutual funds generally do not invest in venture capital, private equity, or restricted shares of public companies. Consequently, individuals who desire to invest in such securities are unable to do so through diversified mutual funds. In this paper, we identify public policies and regulations that discourage mutual fund involvement in the markets for illiquid equity. We also present evidence that changes in SEC policy caused mutual funds to retreat from investing in illiquid equity. Under the Investment Company Act of l940, the SEC requires mutual fund boards to determine and report the “fair value” of their investments in restricted shares and other illiquid equity claims. The SEC interprets fair value to mean value in current sale. Under the Investment Company Act, fair value reporting is a “certification” standard that presumes investors rely on the value representations of the fund board and its auditors. We consider whether alternatives to certification and current sale valuation could reduce barriers to mutual fund investment, without exposing individuals who invest in mutual funds to excessive risk or potential manipulation. To assess the effects of public policies, we analyze recent efforts of the SEC to apply the fair-value standard and examine court decisions arising from subsequent litigation. We also analyze the financial economics literature concerning discounts for illiquidity and the implications for valuing restricted shares. The paper concludes with a discussion of policy alternatives, including allowing funds to rely more on “transparency” in lieu of certification and allowing funds more latitude in determining and reporting the values of their illiquid securities.

Are NBA Fans Becoming Indifferent to Race? Evidence from the 1990s

Previous studies, using data from the 1980s, found that racial composition of NBA teams is positively correlated with racial composition of the metropolitan markets in which the teams are located. Researchers have interpreted this evidence as consistent with a "customer discrimination" hypothesis. We reconsider this hypothesis by examining evidence from the 1990s and generate three principal findings. First, based on player performance statistics, we find no evidence of discrimination at the league level--that is, the best players appear to be playing in the league regardless of race. Second, players, categorized by race, are not randomly distributed across teams. Instead, the relationship between team racial composition and metropolitan area racial composition, while weaker than in the 1980s, persists in the NBA in the 1990s. Hence, teams located in areas with greater concentration of white population may find it revenue enhancing to cater to customer demand for viewing teams that include white players. Our third finding, based on revenue from home game attendance, is that as the number of white players declined significantly over the decade, the revenue product of a white player increased on the margin. This effect appears to be more pronounced for teams located in cities with larger white populations. We also find evidence that, in recent years, the top-performing white players in the NBA tend to locate in cities with larger white populations, suggesting that teams in these cities place a higher marginal value on such players.Customer Discrimination; Race; Sports; National Basketball Association

Does Basic Skills Education Work? Some Evidence from the National Adult Literacy Survey

No Abstract available

Customer rage: Triggers, tipping points, and take-outs

The article presents the results of a study of customer rage, which involved 50 interviews with enraged customers from the U.S., Australia, Thailand and China. It focuses on the psychological processes underlying incidents of customer rage. These are defined as cases where customers become so infuriated at a perceived lack of customer service that they may verbally or physically attack employees, or damage corporate property. It was found that such incidents typically were the result of escalating anger, rather than an immediate reaction. They usually were preceded by a series of interactions with the firm which were perceived as insulting or threatening by the customer

Resistance training volume, energy balance and weight management: Rationale and design of a 9 month trial

The increased prevalence of obesity and the lack of treatment success both argue for the design and evaluation of strategies to prevent the development of overweight and obesity. To date, the role of resistance training (RT) in this regard is largely unexplored. RT may be effective for weight management as a result of increased fat-free mass (FFM), which may result in increased resting metabolic rate and increased physical activity energy expenditure. However, the literature relative to the efficacy of RT protocols recommended for healthy adults to alter the aforementioned parameters is inconsistent or inadequately evaluated. We will conduct a 9 month randomized controlled efficacy trial to compare changes in body composition (fat mass, FFM, % body fat) and energy balance in response to 2 volumes of RT (1 vs. 3 sets vs. non-exercise control) both at the completion of training (9 months) and 1 year later (body composition). This investigation will be conducted in a sample of healthy, normal and overweight, sedentary, young adult men and women; a group at high risk for development of overweight and obesity. Our results will provide information relative to the minimum volume of RT that may be associated with body weight/fat gain which may inform the development of guidelines for RT to prevent weight gain or to alter body composition

Core Health Outcomes In Childhood Epilepsy (CHOICE):Protocol for the selection of a core outcome set

This is the final version of the article. Available from BioMed Central via the DOI in this record.BACKGROUND: There is increasing recognition that establishing a core set of outcomes to be evaluated and reported in trials of interventions for particular conditions will improve the usefulness of health research. There is no established core outcome set for childhood epilepsy. The aim of this work is to select a core outcome set to be used in evaluative research of interventions for children with rolandic epilepsy, as an exemplar of common childhood epilepsy syndromes. METHODS: First we will identify what outcomes should be measured; then we will decide how to measure those outcomes. We will engage relevant UK charities and health professional societies as partners, and convene advisory panels for young people with epilepsy and parents of children with epilepsy. We will identify candidate outcomes from a search for trials of interventions for childhood epilepsy, statutory guidance and consultation with our advisory panels. Families, charities and health, education and neuropsychology professionals will be invited to participate in a Delphi survey following recommended practices in the development of core outcome sets. Participants will be able to recommend additional outcome domains. Over three rounds of Delphi survey participants will rate the importance of candidate outcome domains and state the rationale for their decisions. Over the three rounds we will seek consensus across and between families and health professionals on the more important outcomes. A face-to-face meeting will be convened to ratify the core outcome set. We will then review and recommend ways to measure the shortlisted outcomes using clinical assessment and/or patient-reported outcome measures. DISCUSSION: Our methodology is a proportionate and pragmatic approach to expediently produce a core outcome set for evaluative research of interventions aiming to improve the health of children with epilepsy. A number of decisions have to be made when designing a study to develop a core outcome set including defining the scope, choosing which stakeholders to engage, most effective ways to elicit their views, especially children and a potential role for qualitative research.This study is part of Changing Agendas on Sleep, Treatment and Learning in Childhood Epilepsy (CASTLE), which is funded by the National Institute for Health Research (NIHR) Programme Grants for Applied Research RP-PG-0615-20007

Climate Fluctuation and Agricultural Change in Southern and Central New England, 1765-1880

This article discusses the theory that previous discussions of the decline of Maine population in the period 1765-1880 failed the address the impact of weather fluctuations on the society of Maine

Aquilegia, Vol. 18 No. 3, May-June 1994: Newsletter of the Colorado Native Plant Society

https://epublications.regis.edu/aquilegia/1071/thumbnail.jp