Matching Items (17)
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- All Subjects: Finance
- Creators: Licon, Wendell
- Member of: Barrett, The Honors College Thesis/Creative Project Collection
Description
This paper provides evidence through an event study, portfolio simulation, and regression analysis that insider trading, when appropriately aggregated, has predictive power for abnormal risk-adjusted returns on some country and sector exchange traded funds (ETFs). I examine ETFs because of their broad scope and liquidity. ETF markets are relatively efficient and, thus, the effects I document are unlikely to appear in ETF markets. My evidence that aggregated insider trading predicts abnormal returns in some ETFs suggests that aggregated insider trading is likely to have predictive power for financial assets traded in less efficient markets. My analysis depends on specialized insider trading data covering 88 countries is generously provided by 2iQ.
ContributorsKerker, Mackenzie Alan (Author) / Coles, Jeffrey (Thesis director) / Mcauley, Daniel (Committee member) / Licon, Wendell (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor)
Created2014-05
Description
The purpose of this paper is to review the effects of the Dodd-Frank Title VII Clearing Regulations on the Over-the-counter (OTC) derivatives market and to analyze if the benefits of the Title VII regulations have outweighed the costs in the OTC derivatives market by reducing systematic(market) risk and protecting market participants or if the Title VII regulations’ costs have made things worse by lessening opportunities in the OTC derivatives market and stifling economics benefits by over regulating the market. This paper strives to examine this issue by explaining how OTC are said to have played a part in the 2008 Financial crisis. Next, we give a general overview of financial securities, and what OTC are. Then we will give a general overview of what the Dodd-Frank Wall Street Reform and Consumer Protection Acts are, which are the regulations to come out of the 2008 Financial crisis. Then the paper will dive into Dodd-Frank Title VII Clearing Regulations and how they regulated OTC derivatives in the aftermath of the 2008 Financial crisis. Next, we discuss the Clearing House industry. Then the paper explores the major change of central clearing versus the previous bilateral clearing system. The paper will then cover how these rules have affected OTC derivatives market by examining the works of authors, who both support the regulations and others, who oppose the regulations by looking at logical arguments, historical evidence, and empirical evidence. Finally, we conclude that based on all the evidence how the Dodd-Frank Title VII Clearing Regulations effects on the OTC derivatives market are inconclusive at this time.
ContributorsThacker, Harshit (Co-author) / Charette, John (Co-author) / Aragon, George (Thesis director) / Stein, Luke (Committee member) / Department of Information Systems (Contributor) / School of Accountancy (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
The purpose of this paper is to review the effects of the Dodd-Frank Title VII Clearing Regulations on the Over-the-counter (OTC) derivatives market and to analyze if the benefits of the Title VII regulations have outweighed the costs in the OTC derivatives market by reducing systematic(market) risk and protecting market participants or if the Title VII regulations’ costs have made things worse by lessening opportunities in the OTC derivatives market and stifling economics benefits by over regulating the market. This paper strives to examine this issue by explaining how OTC are said to have played a part in the 2008 Financial crisis. Next, we give a general overview of financial securities, and what OTC are. Then we will give a general overview of what the Dodd-Frank Wall Street Reform and Consumer Protection Acts are, which are the regulations to come out of the 2008 Financial crisis. Then the paper will dive into Dodd-Frank Title VII Clearing Regulations and how they regulated OTC derivatives in the aftermath of the 2008 Financial crisis. Next, we discuss the Clearing House industry. Then the paper explores the major change of central clearing versus the previous bilateral clearing system. The paper will then cover how these rules have affected OTC derivatives market by examining the works of authors, who both support the regulations and others, who oppose the regulations by looking at logical arguments, historical evidence, and empirical evidence. Finally, we conclude that based on all the evidence how the Dodd-Frank Title VII Clearing Regulations effects on the OTC derivatives market are inconclusive at this time.
ContributorsCharette, John (Co-author) / Thacker, Harshit (Co-author) / Aragon, George (Thesis director) / Stein, Luke (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Dean, W.P. Carey School of Business (Contributor) / Department of Information Systems (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
The following thesis discusses the primary drivers of value creation in a leveraged buyout. Value creation is defined by two broad criteria: enterprise value creation and financial value creation. With enterprise value creation, the company itself may be improved, which in turn may have positive implications on the economy at large. As the analysis of enterprise value creation is outside the scope of publicly available information and data, the core focus of this thesis is financial value creation. Financial value creation is defined as the financial returns to a given private equity firm. Amongst this segment of value creation, there are roughly three primary categories responsible for generating returns: financial engineering, governance improvements, and operational improvements. The attached literature review and subsequent chapters of this thesis discuss the academic drivers of value creation and the outputs of a leveraged buyout model conducted on a public company, Schnitzer Steel, that has been determined to be an ideal candidate for a buyout.
ContributorsAlivarius, Chadwick (Author) / Simonson, Mark (Thesis director) / Stein, Luke (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Dean, W.P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
The purpose of the present study is to examine how the Sales and Operation Plan (S&OP) process can be improved in the manufacturing industry by using a cost model to evaluate changes in the manufacturing forecast in addition to reviewing past financial performance. The additional use of a cost model transitions form using a standard traditional S&OP process to dynamic modeling and scenario analysis that may lead to different decisions being made. The manufacturing company S&OP processes in scope of this project is suspected to not be using a cost model when making financial decisions but rather the traditional S&OP process. They do not have a rolling budget in place, but rather a static budget also known as an Annual Operating Plan.
ContributorsSeiki, Kaila (Author) / Licon, Wendell (Thesis director) / Garverick, Michael (Committee member) / Department of Finance (Contributor) / Department of Information Systems (Contributor, Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
Description
The purpose of this paper is to study the impact that poison pills have on the value of share prices after the cancellation of a transaction. While various studies have focused on the generic share price impact of poison pills, very few have focused on the impact of poison pills in cancelled transactions. Based on our research and analysis, in cancelled transactions, target firms that have poison pills prior to the transaction and target firms without poison pills generate returns above the announcement date premium and subsequent investment in the S&P 500 when held to the cancellation of the transaction and when held from cancellation to 6 months after the transaction. This analysis can contribute to the argument that holding shares of firms regardless of cancellation risk is preferable to taking profit at announcement date. Additionally, it can contribute to the study of undiscovered pricing impact of poison pills.
ContributorsChotalla, Gurkaran (Co-author) / Amjad, Hamza (Co-author) / Reddy, Samir (Co-author) / Stein, Luke (Thesis director) / Lindsey, Laura (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
We chose to analyze Apple's current cash and cash equivalents balance of $246.1 billion. To fully understand how to maximize Apple's investment using this cash balance, we performed detailed due diligence on the company. We analyzed the history of apple, a timeline of their major product releases, their financial statements, product mix, and the industries in which they operate. This allowed us to gain a deeper understanding of available opportunities. After doing our due diligence on the company, we look at their current cash levels and potential reasons that the cash balance has been increasing so quickly. Another component of their cash balance is the implications of a tax holiday for repatriation, so we also looked at the potential effects of this on Apple's cash balance. Finally, we begin the main portion of our project where look at the six potential options for the cash. We cover share buybacks, dividends or a special dividend, paying down debt, investing in research and development, making a large acquisition, or continuing to build a high cash balance. We pull data on each of these, look at financial metrics and many different numbers to evaluate which of these six options would maximize shareholder value. A large portion of our work was spent looking at acquisition targets. We finally vetted three potential targets: Tesla, Netflix, and Disney. These companies made sense for a number of different qualitative reasons, but after looking at them from a financial standpoint we concluded Disney was the only company worth modeling out. A detailed financial model was built on Disney to find a purchase price. Included in this was a discounted cash flow analysis, comparable company's analysis, analyzing precedent transactions, and then finding an enterprise value based on the model. We also built an accretion dilution model to see what the effect on earnings per share is and also what the combined entity would look like. In order to present our findings, we built a pitch book. A pitch book is the standard type of presentation that investment banks use in order to show their recommendations to companies.
ContributorsMuscheid, Michael (Co-author) / Klein, Matthew (Co-author) / Lauro, John (Co-author) / Gagner, Landon (Co-author) / Simonson, Mark (Thesis director) / Stein, Luke (Committee member) / Department of Economics (Contributor) / Department of Finance (Contributor) / School of Accountancy (Contributor) / W. P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2017-05
Description
An integral part of the financial system, the evolutionary history of commercial banking remains largely uncharted and is often grouped into banking development as a whole. Previous research on banking has primarily relied on economic analysis or has placed banking in a larger social context. This work aims to bridge the two by classifying commercial banking growth into four cycles of expansion, application, and decline. Drawing from historical accounts and growth cycle theory, this framework for classification is developed to better synthesize its progress and the fundamental innovations that changed the banking system. Beginning in 1150 with the foundation for deposit banking, the next three cycles of 1500, 1750, and 1933 mark periods of great innovation and a push toward the regulatory environment, technology, and globalization that define modern commercial banking. Paralleling the economic, financial, and political development of the Western World, its evolution is guided by three themes: the increased accumulation and flow of capital, regulation, and market expansion.
ContributorsSinger, Andrea Cayli (Author) / Licon, Wendell (Thesis director) / Hoffmeister, Ron (Committee member) / Brooks, Dan (Committee member) / Barrett, The Honors College (Contributor) / School of Historical, Philosophical and Religious Studies (Contributor) / W. P. Carey School of Business (Contributor) / Department of Finance (Contributor)
Created2013-05
Description
Reverse leveraged buyouts (RLBOs) are a common practice for private equity firms across the globe and have been on the receiving end of public scrutiny. While the performance of RLBOs has been studied in the past, very few if any works have been published concerning the specific results of reverse leveraged buyout transactions performed by the largest private equity mega-funds specifically. We collected a dataset of 22 transactions and conducted quantitative and qualitative analysis on 18 of the aforementioned transactions in order to determine the magnitude of positive effects that RLBOs had on each company. Less than half of mega-fund RLBOs that had an initial public offerings outperformed the Dow Jones Industrial Average on a compound annual growth (CAGR) basis, post-exit. Even less outperformed the S&P 500 index, and substantially less than that outperformed industry averages. It can clearly be seen that while averages dictate that large scale RLBOs do not seem profitable, there is a noticeable disparity between the success and failure of each deal when looking at price performance. This data makes the argument that while RLBOs are difficult to make successful, if the market receives them well then they can be some of the highest returning transactions.
ContributorsKaye, Steven (Co-author) / Chavez, Aaron (Co-author) / Aragon, George (Thesis director) / Stein, Luke (Committee member) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
There is a long standing debate on the various forms of investment in the growing marketplace as to which is best for the individual investor needs. Two similar types of investments are mutual funds and exchange-traded funds (ETF), which are both securities that are made up of a pool funds. They are comparable in concept but have key differences that make this study unique. Mutual funds are much more commonly used and are more prevalent in investment publications. This study addresses the benefits and drawbacks of mutual funds and ETFs and how their structures influence returns over a period of time. The purpose of this study was to take historical data of both mutual funds and ETFs to find their returns and see which, if either, outperformed the other based on several different calculations and performance measures. To improve the validity of this study, we found funds from both the technology and utility sector, for each investment vehicle in order to evaluate different classes of risk. We kept the study consistent and compared technology mutual funds to technology exchange traded funds, and so on with the utility sector. We created four portfolios consisting of around eight to ten high quality funds based on criteria. Results indicated that ETFs outperformed mutual funds in both the utility and technology sectors. In order to adjust for risk, we ran Jensen's measure and found that ETF's still outperformed mutual funds. This is significant because mutual funds are highly regarded in the investment world and often thought of as better than ETFs mainly due to their active management and long term results as they have been around for longer than ETFs. This study proves that investors should be putting more money into ETFs because they yield higher returns over time and cost less in fees, allowing the investor to retain a larger portion of their investment.
ContributorsRietman, Marissa (Co-author) / Melton, Mikayla (Co-author) / Licon, Wendell (Thesis director) / Budolfson, Arthur (Committee member) / W. P. Carey School of Business (Contributor) / School of Accountancy (Contributor) / School of International Letters and Cultures (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05