Dividend initiation announcement effects and the firm's information environment

Article Abstract:

A study was conducted on the effect of dividend initiation announcements on corporate information environments. Tests were conducted to determine the relationship between the magnitude and volatility of security price reaction to the announcements and the information environment. Four firm-specific characteristics were chosen as proxy measures for the information environment, namely, size, number of institutions holding firm equity, percentage of institutional equity holding and number of analysts following. Results showed a significant association between magnitude and the information environment.

Analysis, Dividends, Information theory

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Cost-volume-profit anlysis under uncertainty when the firm has production flexibility

Article Abstract:

Major developments on the theory of the firm since the 80s has focused on the evaluation of firms' decision processes who have operating flexibility. Previous research is limiting as it assumes that firms have no flexibity in its production decisions. The study examines the cost-volume-profit problem when the firm has operating flexibility. Results show that the highest firm output with production flexibiltiy is less than that of a firm with ex post adjustment capacity. Management needs to be more proactive in output planning when interest rates are high if firm output demand is ambiguous.

Research, Break-even analysis

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Discussion of 'International Diversification and Firm Value.'

Article Abstract:

Authors Neil Garrod and William Rees furnish a very useful contribution to the body of literature on the effect of global diversification on corporation value. The authors use a specific valuation model to gauge whether or not variations exist between the valuation of foreign earnings/assets and domestic earnings/assets using a pooled sample of 5,704 UK companies operating during the period 1991-1996. The authors challenge research which proposes a link between international expansion and firm value.

Multinational Corporations, Diversification Analysis, Diversified companies, International aspects, International business enterprises, Criticism and interpretation, Business planning, Valuation, Diversification in industry, Industrial diversification, Corporate growth, Garrod, Neil, Rees, William

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