Management Buyouts of Divisions and Shareholder Wealth

This paper examines the wealth effects to parent company shareholders around the announcement of divisional management buyouts. Despite the relative absence of “arm's-length” bargaining between buyer and seller, there is no evidence that divisional management buyouts result in reductions in parent company share prices. Instead, small but statistically significant wealth gains are found during the two-day period surrounding the buyout announcement. This evidence suggests that divisional buyouts reallocate ownership of corporate assets to higher valued uses and that parent company stockholders share in the expected benefits of this change in ownership structure.     

Personal Factors Related to Consumer Product Disposal Tendencies

Extended channels of distribution provide numerous options for consumers who wish to move still useful but unwanted products to other consumers. The rationales consumers use in choosing disposal options, including those resulting in redistribution, are described. Affect and demographic correlates for each disposition tendency provide information to help develop consumer behavior theory regarding redistribution, as well as provide strategic implications for extended channels.     

Household Money Management: Recognizing Nontraditional Couples

This research examines factors related to household financial decision-making roles. Findings suggest significant differences between traditional couples (first marriages) and nontraditional couples (remarrieds and cohabitors). Marital status appears related to household money management decisions (bank card and checking account management), investment management decisions (planning savings and home investment), and decisions related to financing. Conclusions suggest that nontraditional consumer households may need more sensitive recognition of these differences and that marketers may reduce customer dissatisfaction and embarrassment by more consciously designing programs and materials to communicate such recognition.     

Consumer Household Materials and Logistics Management: Inventory Ownership Cycle

This paper examines the various stages and activities of consumers' management of owned possessions including acquisition, ownership, and disposition. Using a materials management perspective, more frequently found in industrial marketing, the authors develop a consumer model of management of household goods. Stages of the model are illustrated using consumer anecdotes collected as exploratory research. Implications for researchers, practitioners, educators, and policy makers are discussed in terms of how the materials management perspective can be used to help deliver better value in products and services to consumers by understanding the activities in each stage of ownership.     

A BETTER UNDERSTANDING OF WHY NPV UNDERVALUES MANAGERIAL FLEXIBILITY

The Real Options paradigm addresses the valuation of managerial flexibility in capital budgeting. Despite the great strides achieved by researchers in this field, many financial analysts have chosen not to adopt this new paradigm due to a lack of comfort with the approach and the mathematical complexity of the valuation models. This article shows how some projects with real options can be valued using simple and familiar tools-discounting expected cash flows after adjusting the discount rate. Unless the discount rate is adjusted to account for the impact of real options on risk, a traditional net present value (NPV) analysis misses the value of flexibility. By narrowing the gulf between Real Options analysis and more familiar tools, the weighted average discount rate (WADR) approach introduced in this paper may help novices better understand die Real Options paradigm, which subsequently may gain the wider acceptance it deserves. Though the WADR approach is practical only for simple real options, comfort with the approach may encourage analysts to pursue more advanced and robust real option valuation techniques for more complex applications.