The impact of nominal stock price on ex-dividend price responses

In this paper, we examine whether nominal stock price can help to explain the ex-dividend day anomaly where stock prices drop by less than the dividend amount on the ex-dividend date. We find that stocks with lower nominal prices have ex-dividend day price drops that are more consistent with theoretical predictions based on an efficient market. After controlling for factors that have been previously documented to influence ex-dividend day stock price behavior, price-drop-to-dividend ratios are closer to one for lower priced stocks. To further explore this phenomenon, we examine the change in the price-drop-to-dividend ratio around stock splits. Firms that split their shares have a larger price-drop-to-dividend ratio after the split, and companies that reverse split their shares have a smaller price-drop-to-dividend ratio after the split. Our evidence indicates that ex-dividend day stock price behavior is influenced by the nominal price of a share and that this relation could also influence the decision to split a firm’s shares.     

The Growing Blessing of Unicorns: The Changing Nature of the Market for Privately Funded Companies

The past 15 years have seen the emergence of large infusions of private capital at levels previously accessible only in public markets. One direct effect of these non‐public fundraisings is the spawning of private entities with market valuations reaching $1 billion, thereby achieving the status of unicorns. As the authors reported in an earlier study, by the end of 2015, there were 142 unicorns with an aggregate value exceeding $500 billion. The conviction of many investors and managers at that time was that these companies could best create value by staying private, often by adopting governance structures focused on creating superior operating performance. It was also widely believed that unicorns would remain outside the public markets longer and succeed in attracting even more private capital, thereby enabling their investors to capture a greater share of the increase in company value. In this study, the authors examine how the characteristics and dynamics of “the blessing” have changed in the past five years. Despite the widespread view that the valuations and private financing trend fueling this market were not sustainable, the authors report that by March 2020, the “net” number of unicorns had grown from 142 to 464, a number that doesn't reflect the transformation of over half of the 2015 sample through acquisition or public offering and their replacement by new unicorns. Further, the cumulative market valuation of unicorns more than doubled from $500 billion to $1.37 trillion, representing growth far greater than that in the public equity markets (some 26% per annum, as compared to 9% for the S&P 500) over the same period—and the blessing has become more diversified, both in terms of industry and geographical location. The authors also consider what happens when unicorns “graduate” to a different organizational form by means of an IPO, private buyout, or business failure. Analyzing the 107 firms that departed the sample between 2015 and 2020, the authors report that the average lifespan of a unicorn from its founding date to its exit date has been 9.5 years, indicating that such firms indeed remain privately owned for a longer time than in the past. Additionally, the study finds that the founders and initial investors in unicorns have fared quite well, cashing out their initial investment at almost six times invested capital, on average. These private investment performance metrics have been significantly higher than the returns to public shareholders in the same firms during the post‐IPO period, signifying that unicorn investors have captured much more of the value created in the company's growth phase than public stockholders.     

The CLERP 9 Audit Reforms: Benefits and Costs Through the Eyes of Regulators,Standard Setters and Audit Service Suppliers

Over the past decade or more Australia amongst other jurisdictions has experienced substantial reforms to auditing regulation in an effort to boost public confidence in the auditing profession. This paper aims to examine whether these changes in the Australian regulatory environment for audits have (a) provided enhanced confidence in reported financial data, (b) impacted audit costs and (c) not limited competition in the market for audit services. Using qualitative interview data, this study reports on the perceptions of auditors, auditing standard setters and regulators in relation to the CLERP 9 reforms to the Australian auditing regime in the later part of the 2000s. A theoretical framework is developed to evaluate whether these reforms are substantive enough in nature to effect public confidence in reported financial data and market competition in audits.     

Structure and Argument in Accounting Standards

This paper summarises the results of a detailed examination of the contents of explanatory notes of Statements of Standard Accounting Practice. The presentation of argument in the explanatory notes is discussed in the light of recent writings on rhetoric, and the Accounting Standards Committee is assessed in terms of its performance as a persuader rather than by reference to the substantive requirements of SSAPs. The paper suggests that changes in the structure of future accounting standards would be desirable, and concludes by linking the rhetorical perspective to the notion of a conceptual framework.     

别再救通用汽车

奥巴马总统决定从税款中再拨出301亿美元,以救济通用汽车,对此,他的解释是:当前美国正身处经济严重衰退与金融危机并存的时代,艰难异常,而这些企业的崩塌会殃及无数美国人,而不仅限于汽车产业内部.     

The Japanese Crisis — A Case of Strategic Failure?

This paper provides an alternative insight into Japan's current economic problems. We concentrate upon the role played by the economy's central actors, namely Japan's transnational corporations. Since the early 1980's, Japan's transnationals have become dominant players in the global economy, and now have a higher rate of physical investment in new, overseas greenfield sites than their competitors. This has had detrimental consequences for Japan's domestic economy, particularly for small firms who operate in keiretsu networks. This has led to concerns about the 'hollowing out' of Japan's domestic industry raising the possibility of long-term industrial decline and 'strategic failure'.