Corporate sales, equity trading, and risk

Article Abstract:

Empirical evidence suggests a positive association between trading activity and stock price changes which, in turn, implies the interdependence among cash flow, trading and sales. These relationships are explained by the corporate sales and equity trading hypothesis, and shows that operating cash flow is equal to a per unit contribution margin times a random number of sales events less fixed expense. The hypothesis also reveals a negative correlation between risk measures and contribution margin, which indicates an inverse association between risk and operating efficiency.

Security brokers and dealers, Securities Brokerage, Cash Management, Securities Trading, Evaluation, Stocks, Risk (Economics), Securities industry, Cash flow

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A re-examination of the case for accounting separately for the debt and equity features of convertible debt

Article Abstract:

An analysis was conducted to examine two main assumptions regarding the separate accounting of debt and equity features of convertible bonds. These assumptions stressed that convertible debts can broken down to two or more financial instruments and convertible bonds have significant economic function similar to a bond with a detachable warrant. Results revealed that a convertible bond could not be broken down into financial instruments and its features could not be replicated by any bond with detachable warrant.

Financial Management, Corporate Bonds, Corporate Debt & Equity Securities, Financial instruments, Convertible bonds

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Equity rights issues in Spain: flotation costs and wealth effects

Article Abstract:

Studies of equity offering dynamics in Spain show a positive correlation between underwriting an issue and relative flotation costs, and a negative correlation between these costs and the concentration of ownership. Findings on other price reactions are also discussed.

Spain, Economic aspects, Comparative analysis, Equity (Finance)

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