symbol that represents the cost of raising capital

Ngày tải lên: 16/12/2013, 14:57

... shows that the cost of capital of the firm depends on four factors: the risk free rate, the aggregate risk tolerance of the market, the expected cash flow of the firm, and the covariance of the ... models of asset pricing, the expected rate of return on a firm j’s stock is the rate, R j , that equates the stock price at the beginning of the period, P j , to the cash flow at the end of the ... assume that, to align the interests of the manager with that of investors, the manager maximizes share price. That is, the manager chooses the investment level to maximize the beginning -of -the- period...

Ngày tải lên: 06/03/2014, 21:20

... impact of the AAER. If the restatement occurs in conjunction with, or following, the AAER issuance, it likely does not impact the change in cost of equity capital surrounding the issuance of the ... determine the need to censure the auditor via additional litigation. 13 Each of these situations adds a level of severity to the AAER, increasing the potential impact on the firm’s cost of equity capital. ... hypothesis, stated in alternative form, examines this role of severity in determining the change in cost of equity capital: H3: The increase in cost of equity capital will be greater when the...

Ngày tải lên: 01/06/2014, 14:04

... the collapse of Japan Inc. after the stock market crash of 1990, the Asian crisis of the mid-1990s, the fabulous technology boom/bust cycle at the turn of the millen- nium, and the unprecedented ... a consequence they led their creators to assert, incor- rectly, that there was no theoretical justification for the visible hand of government to come to the rescue of banks and other financial institutions. Finally, ... a piece of the world’s banking system. The risk is that this becomes the general state of affairs. I believe that a move toward the socialization of investment—again, a 10 • T HE C OST OF C APITALISM How...

Ngày tải lên: 20/06/2014, 20:20

... Novem- ber of 2008, on the heels of widespread evidence of economic retreat. At that time the NBER, the of cial arbiter, also declared that the United States was in recession. It set the start ... excessive uses of risk and concentration of investment. And the interplay of these two flaws explains each of the major economic declines of the past 25 years. In summation, the savvy analyst must be of two ... indeed shocked by the events of 2008. Shock in hand, they can argue that their sense of the way the world works is intact. Listen to speeches from representatives of the European Central Bank, the ECB,...

Ngày tải lên: 20/06/2014, 20:20

... events of 9/11. That tragedy was the worst moment in the lives of most Americans of my genera- tion. But the economic retrenchment that gripped the country had The Brave-New-World Boom Goes Bust: The ... bubble of the proportions of Japan in the 1980s or the technology bubble in the United States in the 1990s. Indeed, in this case you could argue that the bust was as much an example of excess as the ... and the economy. CASH, AT LONG, LONG LAST, IS TRASH Equity ownership, or a piece of the action, is the essence of the difference between capitalist-based economies and the planned economies of the Soviet...

Ngày tải lên: 20/06/2014, 20:20

... important, the fact that the Fed funds rate had been lifted over the period was irrel- evant to borrowers in business. Their borrowing costs were lower, and the global boom was proof positive that they ... recommend that the ECB be considered for the Andrew Mellon Policy Blunder of the Century Award. Mellon, in charge of the U.S. Federal Reserve in the 1930s, actually tightened interest rates in the ... And powerful mathematical models inputted that “truth.” The fact that many mortgage companies that issued credit to home buyers were not in the business of holding the mortgages created moral hazard. The...

Ngày tải lên: 20/06/2014, 20:20

... rejected the neoclassical synthesis, arguing that much of the genius of Keynes was lost in the attempt to preserve the lion’s share of the classical economic tradition. To grossly oversimplify, the ... protecting the thousands of credit links that Bear 152 • T HE C OST OF C APITALISM Fans of the book Freakonomics will find nothing unsettling about the criticisms that follow in this chapter. That fantastically ... rise in gasoline prices is the subject of micro theory. What consumers, taken together, might do, and what that would mean for the overall economy, is the subject of macro theory. 1 In this chapter...

Ngày tải lên: 20/06/2014, 20:20

... brain skills. Looking through the details of the question to get to an overarching sense of the issue is at the heart of right brain thinking. Out of the Mouths of Babes The best right brain thinking ... avoided. That, of course, puts me at odds with many of the most vociferous fans of Hy Minsky. What follows is a brief sketch of the experiences that led me to the prejudices that I hold. was that ... it was their focus on the speculative nature of long-term expectations. As Keynes put it: . . . the orthodox theory assumes that we have a knowledge of the future of a kind quite different from that...

Ngày tải lên: 20/06/2014, 20:20

... part of the mainstream formulation. The simple truth is that theorists owe this to the policy-making world. The sooner they deliver it, the better. 208 • T HE C OST OF C APITALISM Cushioning the ... declare that the analysis they confront is straightforward and that they are comfortable with the paper being issued. Importantly, central bankers will need to assure the world of investors that they ... leading up to the crisis of 2008, many champions of free market capitalism warned about the tenuous nature of the global credit markets. Warren Buffett, the sage of Omaha, labeled the mar- kets...

Ngày tải lên: 20/06/2014, 20:20

... rationally. In summation, the events of 2008 make clear that economic policy and the theories that buttress policy are in need of a new paradigm. While we celebrate the virtues of capitalism, we need ... incor- rectly, that there was no theoretical justification for the visible hand of government to come to the rescue of banks and other financial institutions. Finally, the marginalization of Minsky ... economists joined together in a cele- bration of the Goldilocks economy. With the dismal record of the 1970s as their point of comparison, mainstream analysts focused on the not-too-hot, not-too-cold...

Ngày tải lên: 21/06/2014, 12:20

... The value of what they owe—their liabilities—is always supposed to be lower than the value of what is owed to them—their assets. When they subtract their liabilities from their assets, the remainder ... $588,000, and the house is worth $538,000. If lots of home loans go the way of Hanna’s loan, then the total value of the bank’s assets falls below the total value of its loans to other people—its ... fullness of time we learned that the Financial Markets as a Source of Instability • 53 Late in the process, countries in the Soviet Bloc were completely out of touch with the desires of their citizenries....

Ngày tải lên: 21/06/2014, 12:20

... Novem- ber of 2008, on the heels of widespread evidence of economic retreat. At that time the NBER, the of cial arbiter, also declared that the United States was in recession. It set the start ... excessive uses of risk and concentration of investment. And the interplay of these two flaws explains each of the major economic declines of the past 25 years. In summation, the savvy analyst must be of two ... Octo- ber 2008 that asset markets needed to be added to the Fed’s list of poten- tially destabilizing excesses. Why? Sadly, it was not the force of ideas that carried the day. It was the end of the Great...

Ngày tải lên: 21/06/2014, 12:20

... bubble!” I looked at the others; they looked down at their shoes. And for the remainder of the two hours the group exchanged pleasantries. In the end the group decided that the big risk going forward, ... events of 9/11. That tragedy was the worst moment in the lives of most Americans of my genera- tion. But the economic retrenchment that gripped the country had The Brave-New-World Boom Goes Bust: The ... so, that a peculiarly Asian form of technological 100 • T HE C OST OF C APITALISM of all the land in the state of California! The shares of Japanese car mak- ers reached values that suggested these...

Ngày tải lên: 21/06/2014, 12:20

... volunteered that I thought that by the end of the year the funds rate would fall to 4 percent. Quite a few e-mails greeted me after the show, most of them critical, and one accused me of excessive use of hallucinogenic ... gripped the United States and then became a world recession. The dynamics that precipitated the U.S. recession, the global capital markets crisis, and the worldwide downturn, are the subject of the ... even the most creative mortgage providers to lift their teaser rates the cost of money forced them to make the adjustment. 140 • T HE C OST OF C APITALISM In the United States, a vocal group of...

Ngày tải lên: 21/06/2014, 12:20

... CENTURY recognized the severity of the crisis that would confront them if they permitted the bankruptcy of a major financial institution. The Treasury justified its inaction by arguing that, unlike the Bear situation, ... and a writer of the insurance. If things go as planned, the buyer pays the insurer the premium. If things go awry, the insurer pays the buyer. Either way, one of the two parties gets the money promised ... capitalism that justify the visible hand of government intervention. • Both classical and Keynesian economists have to accept that these flaws arise in the world of finance, and that they reflect the uncertain...

Ngày tải lên: 21/06/2014, 12:20

Ngày tải lên: 21/06/2014, 12:20

Ngày tải lên: 21/06/2014, 12:20

Ngày tải lên: 22/06/2014, 18:20

Ngày tải lên: 22/06/2014, 18:20