Investment decision criteria used by listed New Zealand companies

Article Abstract:

This paper reports the results of a survey of listed New Zealand firms with regard to their investment objectives, their methods of evaluating investment projects and of estimating appropriate hurdle rates, and methods used to evaluate and adjust for project risk differences. Comparisons with similar studies of firms located in the U.S. and Australia indicate that New Zealand firms use accepted normative financial analysis techniques to a much lesser degree than firms in these other countries. The relatively greater usage of accounting-based rather than market-based measures by New Zealand firms is particularly marked. (Reprinted by permission of the publisher.)

Management, Australia, Investments, Accounting, Corporations, New Zealand, Financial research, Corporations, Australian, Corporations, New Zealand

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CV or not CV? That is the question

Article Abstract:

There is considerable confusion and contradiction in the standard finance textbooks regarding the question as to whether investment risks should be estimated using the standard deviation of possible outcomes, or their coefficient of variation. This confusion arises in part from failure to distinguish between the relative risk and the relative attractiveness of alternative projects. It also arises from failure to distinguish between the risk implications of market returns variability and those of accounting returns variability. (reproduced by permission of the publisher)

Methods, Risk assessment, Analysis of variance

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Rights issues and perceived growth rate dilution

Article Abstract:

Financial managers still take into consideration the average subscription price discount despite the belief that the subscription price is irrelevant in managing the shares of their clients. This apparent contradiction betweem theory and practice can be explained by themanagers' concern that reports and analyses of market conditions seldom take into account the adjustment of quasi-splits brought about by rights issues.

Security and commodity exchanges, Research, Financial markets, Financial management, Stock rights, Stockholders' preemptive rights

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