Diversification in Firm Valuation: A Multivariate Copula Approach

We introduce a new discounted cash flow model which adopts the diversification effect of multi-business firms. We face two challenges: One is examining how different diversification extents can affect the firm value due to risk reduction, and the other is modeling segment-specific cash flows and discount rates to reflect the differences in risk and growth characteristics across the different businesses that a firm operates in. Since the co-movement of business segments depends on the state of the economy, we use a multivariate copula approach taking the state-varying dependence of business segments explicitly into account. A high level of a firm's diversification determined by a low dependence between the firm's business segments leads to a lower probability of firm default which results in a higher firm value through reduced bankruptcy costs. We demonstrate this effect by comparing the values of three U.S. firms when modeling independence, dependence with copulas, and perfect dependence between businesses.diversification, firm valuation, dependence modeling, multi-business firm, bankruptcy costs, default probability, copulas, Monte Carlo simulation, discounted cash flow model

Extended dividend, cash flow and residual income valuation models: Accounting for deviations from ideal conditions

Standard equity valuation approaches (i.e., DDM, RIM, and DCF model) are derived under the assumption of ideal conditions, such as infinite payoffs and clean surplus accounting. Because these conditions are hardly ever met, we extend the standard approaches, based on the fundamental principle of financial statement articulation. The extended models are then tested empirically by employing two sets of forecasts: (1) analyst forecasts provided by Value Line and (2) forecasts generated by cross-sectional regression models. The main result is that our extended models yield considerably smaller valuation errors. Moreover, by construction, identical value estimates are obtained across the extended models. By reestablishing empirical equivalence under non-ideal conditions, our approach provides a benchmark that enables us to quantify the errors resulting from individual deviations from ideal conditions, and thus, to analyze the robustness of the standard approaches. Finally, by providing a level playing field for the different valuation approaches, our findings have implications for other empirical settings, for example, estimating the implied cost of capital. --Dirty Surplus,Terminal Value,Steady-State,Valuation Error

Gender differences and inflammation: an in vitro model of blood cells stimulation in prepubescent children

Gender influences clinical presentations and markers in inflammatory diseases. In many chronic conditions, frequency of complications is greater in females, suggesting that continuous inflammatory reaction may induce greater damage in targeted organs and functions.Journal ArticleSCOPUS: ar.jinfo:eu-repo/semantics/publishe

Belief Revision and Delusions: How Do Patients with Schizophrenia Take Advice?

The dominant cognitive model that accounts for the persistence of delusional beliefs in schizophrenia postulates that patients suffer from a general deficit in belief revision. It is generally assumed that this deficit is a consequence of impaired reasoning skills. However, the possibility that such inflexibility affects the entire system of a patient's beliefs has rarely been empirically tested. Using delusion-neutral material in a well-documented advice-taking task, the present study reports that patients with schizophrenia: 1) revise their beliefs, 2) take into account socially provided information to do so, 3) are not overconfident about their judgments, and 4) show less egocentric advice-discounting than controls. This study thus shows that delusional patients' difficulty in revising beliefs is more selective than had been previously assumed. The specificities of the task and the implications for a theory of delusion formation are discussed

Co-movement of Fundamentals: Structural Changes in the Business Cycle

The co-movement of stocks and of fundamentals changes across the business cycle. Empirical studies have shown that the correlation of stock returns is stronger in crisis. We show that the correlation of fundamentals is the highest during crisis using a large sample of quarterly firm revenues aggregated to industry data from 1969 to 2009. The results of our study indicate that the co-movement of stocks is driven by the co-movement of fundamentals and is not an irrational reaction of markets. Both correlations between industries and the aggregate market and correlations between earnings confirm our findings.correlation, business cycle, fundamentals, revenues, earnings, co-movement of stock returns, crisis, bootstrap, permutation test, industry classification

Preparation of poly-D,L-lactide based nanocomposites with polymer-grafted silica by melt blending: Study of molecular, morphological, and mechanical properties

Polylactide was first designed for the pharmaceutical and medical fields. Unfortunately, polylactide, especially poly-D,L-lactide (PDLLA), presents too low mechanical properties for a wide range of applications. The addition of silica nanoparticles should reinforce the mechanical strength of PDLLA. In order to improve silica/polymer interactions, this study focused on the preparation of polymer chain grafted silica using two grafting methods. The first strategy relied upon the ring opening polymerization of D,L-lactide on initiating silica surface (i.e. “grafting from”). The second approach considered a sol-gel synthesis process in presence of Si-OR terminated polylactide chains to promote grafting of these chains on new silica particles (i.e. “grafting to” method). Only “grafting from” silica successfully led to a nanoscale dispersion into the polyester matrix for silica content up to 5 wt%. A 3 wt% content of this silica allowed improving Young modulus of 106.0 % and ultimate tensile stress (UTS) of 63.7 % compared to the PDLLA control

Functionalization of silica synthesized by sol-gel process with PDLLA via "grafting to" method

Due to its properties of biodegradability and biocompatibility, polylactide has been first designed for the medical field, in particular for tissue reconstruction by tissue engineering. However, for this kind of application, its mechanical properties are too low. The addition of silica has been proposed to reinforce the mechanical strength of this biopolymer. The main challenging aspect to realize this nanocomposite is to achieve a good dispersion of nanofillers in the polymer matrix. An effective method to improve compatibility between inorganic particles and polymer matrix relies upon the preparation of PLA grafted silica nanoparticles. To form a network structure with PLA matrix, molecular weight of these grafted chains has to be superior to the critical entanglement molecular weight (CEMW) of 8.5 kDa [1]. This work is dedicated to the functionalization of sol-gel silica by the “grafted to” method. A recurrent problem with this method is the great dependence of the grafting density on the molecular weight of the PDLLA chains. When weight is above the CEMW, grafting densities greater than 0.001 chains/nm2 of silica are difficult to achieve [1]. To increase grafting density of PDLLA chains, these chains were firstly synthesized via ring opening polymerization with Sn(oct)2 as catalyst and with a organosilane (alkoxyde XSi(OR)3), the (3-Aminopropyl)triethoxysilane (APTES) as initiator, instead of a classic protic compound. This process led to the formation of PDLLA capped with three terminal functions Si-O-CH2-CH3. The resulting polyester was then dissolved in tetrahydrofuran under inert atmosphere to prevent hydrolysis of Si-OR functions. After dissolution, silica was synthesized by sol-gel reaction by mixing prehydrolysed tetramethyl orthosilicate (TMOS), dissolved polymer, water and APTES followed by three days of gelation at 65°C. Finally, these nanoparticles were washed several time with methylene chloride and cycle of centrifugation to remove unbound PDLLA and APTES. GPC and 1H NMR have confirmed the targeted molecular weight of PDLLA of 11 kDa with a monomer conversion closed to 100%. FTIR measurement and solid 29Si NMR have confirmed the covalent attachment of PDLLA chains on silica surface. BET analysis, performed after calcination of silica at 400°C, gave a specific surface of 350 m2/g. Finally, TGA allowed us to calculate a grafting yield of 25 % and a grafting density of 0.035 chains/nm2 in a reproducible and manner. As a conclusion, our chemical strategy has been demonstrated successful to increase significantly the grafting density of polyester chains on silica according to a reproducible methodology easier to apply compared to former publications [1][2]