THE EFFECT OF RATE CASES ON PUBLIC UTILITY STOCK RETURNS

Public utility rate cases are economic events because they affect the intrinsic value of the utility. This paper examines the effect of rate cases on public utility stock returns. “Average” rate cases do not appear to affect the utilities' value, but “above-average” and “below-average” settlements cause positive or negative adjustments, respectively.     

DETERMINANTS OF THE RATINGS AND YIELDS ON CORPORATE BONDS: TESTS OF THE CONTINGENT CLAIMS MODEL

A contingent claims model for corporate bonds is tested on newly issued bonds of firms with very simple capital structures. Two default risk measures derived from the model — firm return standard deviation (σ) and leverage (D/V) — explain approximately 78 percent of the variation in the agency ratings on the bonds, based on a probit analysis. Model yield premiums explain almost 60 percent of the variation in market yield premiums. In both analyses, however, firm size is a significant additional variable, suggesting that the contingent claims model is not robust to changes in scale. The assumption of nonstochastic interest rates also appears to be an important misspecification. Institutional restrictions on investments in speculative grade bonds, however, do not affect market yield premiums on such bonds, and thus do not appear to represent a serious misspecification.     

VALUATION OF THE PREFERRED STOCK SINKING FUND FEATURE: A TIME-SERIES APPROACH

This study employs a time-varying coefficient model to examine the relationship between returns on preferred stock with a sinking fund and preferred stock without a sinking fund. The results provide evidence of a major shift in the relationship between the two types of preferred stock coincident to a major change in Federal Reserve Board monetary policy. Results also show several smaller shifts at other times. The findings lend only weak support to link the announcement of a change in bookkeeping practices for insurance companies with a contemporaneous change in the relationship between the two types of preferred issues, as previous studies contended.     

新形势下商业银行拓展对公存款的经营策略--对工商银行宁波市分行开展对公存款业务的若干思考

近几年,随着金融机构的不断增多,对公存款以其成本低、效益高的特点日益受到各家银行的青睐,进而成为各家银行竞争的焦点。本文针对工商银行对公存款占整个金融机构的市场份额不断下降和工商银行对公存款在工、农、中、建四大国有商业银行中的市场份额也逐年下降的现象,指出加强对公存款的组织与管理、加大对公存款的组织力度、不断拓展对公存款领域、稳定增加对公存款,具有十分重要的意义。作者深入调查了工商银行宁波市分行对公存款业务发展情况及其制约因素,提出了树立全新经营理念、加大信息收集力度、设立“对公营销中心”、增强金融服务功能及完善公存考核机制等经营策略。     

THE REGULATION EFFECT OF CREDIT RATINGS ON BOND INTEREST YIELD: THE CASE OF JUNK BONDS

This paper examines the 'regulation effect' of bond ratings of yield. It is shown that the high yield premia on 'speculative bonds' not only reflect the high probability of default, but also contain an effect of regulation. A multiple discriminant analysis (MDA) technique is used to separate the default component of yield premium from the regulation effect. The results in the study suggest that non-regulated investors, by taking advantage of the regulation effect, may earn an extra premium on a diversified portfolio of 'speculative bonds', at least for the period under this study (from January 1982-June 1987).     

A RE-EXAMINATION OF THE EFFECT OF 12B–1 PLANS ON MUTUAL FUND EXPENSE RATIOS

In this paper we re-examine the effect of 12b–1 payments on mutual fund expense ratios by analyzing data from 1988 through 1991. The findings are consistent with previous studies that find charges are a dead-weight cost borne by shareholders. However, we show that this cost increases over time.