Future Earnings Growth Volatility and the Value Premium

The value premium is well established in empirical asset pricing, but to date there is little understanding as to its fundamental drivers. We use a stochastic earnings valuation model to establish a direct link between the volatility of future earnings growth and firm value. We illustrate that risky earnings growth affects growth and value firms differently. We provide empirical evidence that the volatility of future earnings growth is a significant determinant of the value premium. Using data on individual firms and characteristic-sorted test portfolios, we also find that earnings growth volatility is significant in explaining the cross-sectional variation of stock returns. Our findings imply that the value premium is the rational consequence of accounting for risky earnings growth in the firm valuation process.

Valoración actuarial de daños personales y lucro cesante

El objetivo del presente trabajo es el de establecer las directrices de una valoración actuarial en los diversos casos en los que puede ser requerido en caso de litigio e intentar tras realizar una lectura completa de este trabajo tener una visión más cercana y comprensible de lo que al principio podría verse como algo fuera del entendimiento de alguien sin una formación y conocimiento actuarial, sin embargo, con unos conocimientos actuariales básicos el objetivo es que sea sencillo y aporte una visión general de la valoración actuarial. Se compone de una parte teórica donde se define y se desglosan los factores del lucro cesante a tener en cuenta para la realización de su valoración, así mismo, se muestran distintas metodologías, y finalmente se encuentra la parte práctica donde se realizan varias hipótesis, todas ellas con su definición y detallándose su labor en la valoración; y un intervalo de supuestos prácticos que engloba los sucesos más comunes en la vida real. En definitiva, el objetivo del presente trabajo además de entender el procedimiento para la valoración del actuario es tras realizar una lectura completa del trabajo comprender la importancia del papel del actuario, al ser éste la persona encargada de lograr la justicia y equidad social, consiguiendo con sus conocimientos actuariales que aquella persona que se haya visto perjudicada económicamente por el suceso sea resarcida justamente.

Reactive stepping behaviour in response to forward loss of balance predicts future falls in community-dwelling older adults

Background: a fall occurs when an individual experiences a loss of balance from which they are unable to recover. Assessment of balance recovery ability in older adults may therefore help to identify individuals at risk of falls. The purpose of this 12-month prospective study was to assess whether the ability to recover from a forward loss of balance with a single step across a range of lean magnitudes was predictive of falls. Methods: two hundred and one community-dwelling older adults, aged 65–90 years, underwent baseline testing of sensorimotor function and balance recovery ability followed by 12-month prospective falls evaluation. Balance recovery ability was defined by whether participants required either single or multiple steps to recover from forward loss of balance from three lean magnitudes, as well as the maximum lean magnitude participants could recover from with a single step. Results: forty-four (22%) participants experienced one or more falls during the follow-up period. Maximal recoverable lean magnitude and use of multiple steps to recover at the 15% body weight (BW) and 25%BW lean magnitudes significantly predicted a future fall (odds ratios 1.08–1.26). The Physiological Profile Assessment, an established tool that assesses variety of sensori-motor aspects of falls risk, was also predictive of falls (Odds ratios 1.22 and 1.27, respectively), whereas age, sex, postural sway and timed up and go were not predictive. Conclusion: reactive stepping behaviour in response to forward loss of balance and physiological profile assessment are independent predictors of a future fall in community-dwelling older adults. Exercise interventions designed to improve reactive stepping behaviour may protect against future falls.

Predicting future earnings growth: a test of the dividend payout ratio in the Australian market

This paper examines the use of the payout ratio as a predictor of a firm’s future earnings growth. Recent evidence rejects the hypothesis that firm which retain a large portion of their earnings have strong future earnings growth. Higher dividend payout ratios instead correspond to higher future earnings growth. Examining both listed and delisted firms on the Australian stock exchange over the period 1989 to 2008, we provide further evidence that the dividend payout ratio is positively linked to future earnings growth. The results hold over both one, three and five year periods. Furthermore, our results rejected claims that such a relationship was caused by simple mean reversion in earnings. We find no evidence to support the cash flow signaling and free cash flow hypotheses as an explanation for this relationship.

Loss of speciation rate will impoverish future diversity

Human activities have greatly reduced the amount of the earth's area available to wild species. As the area they have left declines, so will their rates of speciation. This loss of speciation will occur for two reasons: species with larger geographical ranges speciate faster; and loss of area drives up extinction rates, thus reducing the number of species available for speciation. Theory predicts steady states in species diversity, and fossils suggest that these have typified life for most of the past 500 million years. Modern and fossil evidence indicates that, at the scale of the whole earth and its major biogeographical provinces, those steady states respond linearly, or nearly so, to available area. Hence, a loss of x% of area will produce a loss of about x% of species. Local samples of habitats merely echo the diversity available in the whole province of which they are a part. So, conservation tactics that rely on remnant patches to preserve diversity cannot succeed for long. Instead, diversity will decay to a depauperate steady state in two phases. The first will involve deterministic extinctions, reflecting the loss of all areas in which a species can ordinarily sustain its demographics. The second will be stochastic, reflecting accidents brought on by global warming, new diseases, and commingling the species of the separate bio-provinces. A new kind of conservation effort, reconciliation ecology, can avoid this decay. Reconciliation ecology discovers how to modify and diversify anthropogenic habitats so that they harbor a wide variety of species. It develops management techniques that allow humans to share their geographical range with wild species.

The effect of past earnings and dividend patterns on the information content of dividends when earnings are reduced

This study pursues two objectives: first, to provide evidence on the information content of dividend policy, conditional on past earnings and dividend patterns prior to an annual earnings decline; second, to examine the effect of the magnitude of low earnings realizations on dividend policy when firms have more-or-less established dividend payouts. The information content of dividend policy for firms that incur earnings reductions following long patterns of positive earnings and dividends has been examined (DeAngelo et al., 1992, 1996; Charitou, 2000). No research has examined the association between the informativeness of dividend policy changes in the event of an earnings drop, relative to varying patterns of past earnings and dividends. Our dataset consists of 4,873 U.S. firm-year observations over the period 1986-2005. Our evidence supports the hypotheses that, among earnings-reducing or loss firms, longer patterns of past earnings and dividends: (a) strengthen the information conveyed by dividends regarding future earnings, and (b) enhance the role of the magnitude of low earnings realizations in explaining dividend policy decisions, in that earnings hold more information content that explains the likelihood of dividend cuts the longer the past earnings and dividend patterns. Both results stem from the stylized facts that managers aim to maintain consistency with respect to historic payout policy, being reluctant to proceed with dividend reductions, and that this reluctance is higher the more established is the historic payout policy. © 2010 The Authors. Journal compilation © 2010 Accounting Foundation, The University of Sydney.

A randomised controlled trial to prevent hospital readmissions and loss of functional ability in high risk older adults: a study protocol

Background Older people have higher rates of hospital admission than the general population and higher rates of readmission due to complications and falls. During hospitalisation, older people experience significant functional decline which impairs their future independence and quality of life. Acute hospital services comprise the largest section of health expenditure in Australia and prevention or delay of disease is known to produce more effective use of services. Current models of discharge planning and follow-up care, however, do not address the need to prevent deconditioning or functional decline. This paper describes the protocol of a randomised controlled trial which aims to evaluate innovative transitional care strategies to reduce unplanned readmissions and improve functional status, independence, and psycho-social well-being of community-based older people at risk of readmission. Methods/Design The study is a randomised controlled trial. Within 72 hours of hospital admission, a sample of older adults fitting the inclusion/exclusion criteria (aged 65 years and over, admitted with a medical diagnosis, able to walk independently for 3 meters, and at least one risk factor for readmission) are randomised into one of four groups: 1) the usual care control group, 2) the exercise and in-home/telephone follow-up intervention group, 3) the exercise only intervention group, or 4) the in-home/telephone follow-up only intervention group. The usual care control group receive usual discharge planning provided by the health service. In addition to usual care, the exercise and in-home/telephone follow-up intervention group receive an intervention consisting of a tailored exercise program, in-home visit and 24 week telephone follow-up by a gerontic nurse. The exercise only and in-home/telephone follow-up only intervention groups, in addition to usual care receive only the exercise or gerontic nurse components of the intervention respectively. Data collection is undertaken at baseline within 72 hours of hospital admission, 4 weeks following hospital discharge, 12 weeks following hospital discharge, and 24 weeks following hospital discharge. Outcome assessors are blinded to group allocation. Primary outcomes are emergency hospital readmissions and health service use, functional status, psychosocial well-being and cost effectiveness. Discussion The acute hospital sector comprises the largest component of health care system expenditure in developed countries, and older adults are the most frequent consumers. There are few trials to demonstrate effective models of transitional care to prevent emergency readmissions, loss of functional ability and independence in this population following an acute hospital admission. This study aims to address that gap and provide information for future health service planning which meets client needs and lowers the use of acute care services.

Loss of neuronatin expression is associated with promoter hypermethylation in pituitary adenoma

The imprinted gene, neuronatin (NNAT), is one of the most abundant transcripts in the pituitary and is thought to be involved in the development and maturation of this gland. In a recent whole-genome approach, exploiting a pituitary tumour cell line, we identified hypermethylation associated loss of NNAT. In this report, we determined the expression pattern of NNAT in individual cell types of the normal gland and within each of the different pituitary adenoma subtypes. In addition, we determined associations between expression and CpG island methylation and used colony forming efficiency assays (CFE) to gain further insight into the tumour-suppressor function of this gene. Immunohistochemical (IHC) co-localization studies of normal pituitaries showed that each of the hormone secreting cells (GH, PRL, ACTH, FSH and TSH) expressed NNAT. However, 33 out of 47 adenomas comprising, 11 somatotrophinomas, 10 prolactinomas, 12 corticotrophinomas and 14 non-functioning tumours, irrespective of subtype failed to express either NNAT transcript or protein as determined by quantitative real-time RT-PCR and IHC respectively. In normal pituitaries and adenomas that expressed NNAT the promoter-associated CpG island showed characteristics of an imprinted gene where approximately 50% of molecules were densely methylated. However, in the majority of adenomas that showed loss or significantly reduced expression of NNAT, relative to normal pituitaries, the gene-associated CpG island showed significantly increased methylation. Induced expression of NNAT in transfected AtT-20 cells significantly reduced CFE. Collectively, these findings point to an important role for NNAT in the pituitary and perhaps tumour development in this gland.

Loss of frugivore seed dispersal services under climate change

The capacity of species to track shifting climates into the future will strongly influence outcomes for biodiversity under a rapidly changing climate. However, we know remarkably little about the dispersal abilities of most species and how these may be influenced by climate change. Here we show that climate change is projected to substantially reduce the seed dispersal services provided by frugivorous vertebrates in rainforests across the Australian Wet Tropics. Our model projections show reductions in both median and long-distance seed dispersal, which may markedly reduce the capacity of many rainforest plant species to track shifts in suitable habitat under climate change. However, our analyses suggest that active management to maintain the abundances of a small set of important frugivores under climate change could markedly reduce the projected loss of seed dispersal services and facilitate shifting distributions of rainforest plant species.

Loss of allele diversity in introduced populations of the hermaphroditic bay scallop Argopecten irradians

The bay scallop Argopecten irradians is a hermaphroditic bivalve native to the Atlantic coast of the United States that was introduced to China for aquaculture production in 1982. It now supports a major aquaculture industry in China. Introduced species often start with limited genetic variability, which is problematic for the further selective breeding. Bay scallop aquaculture is exclusively hatchery based and as the initial introduction consisted of only 26 scallops, there have been concerns about inbreeding and inbreeding depression in cultured populations in China. In this study, eleven simple sequence repeat (SSR) markers were used to compare genetic variation in cultured populations from China with that in a natural population from the east coast of America. Although the difference in heterozygosity was small, the Chinese populations lost 9 of the 45 alleles (20%) found in the wild population. The reduced allele diversity suggests that the Chinese bay scallop populations experienced a bottleneck in genetic diversity that remains significant despite several recent introductions of new stocks aimed at expanding the gene pool. The loss of allele diversity may affect future efforts in selective breeding and domestication, and results of this study highlight the need for additional introductions, advanced breeding programs that minimize inbreeding and continued genetic monitoring. (c) 2007 Elsevier B.V. All rights reserved.

When the library is located in prime real estate: a case study on the loss of space from the Duke University Medical Center Library and Archives.

The Duke University Medical Center Library and Archives is located in the heart of the Duke Medicine campus, surrounded by Duke Hospital, ambulatory clinics, and numerous research facilities. Its location is considered prime real estate, given its adjacency to patient care, research, and educational activities. In 2005, the Duke University Library Space Planning Committee had recommended creating a learning center in the library that would support a variety of educational activities. However, the health system needed to convert the library's top floor into office space to make way for expansion of the hospital and cancer center. The library had only five months to plan the storage and consolidation of its journal and book collections, while working with the facilities design office and architect on the replacement of key user spaces on the top floor. Library staff worked together to develop plans for storing, weeding, and consolidating the collections and provided input into renovation plans for users spaces on its mezzanine level. The library lost 15,238 square feet (29%) of its net assignable square footage and a total of 16,897 (30%) gross square feet. This included 50% of the total space allotted to collections and over 15% of user spaces. The top-floor space now houses offices for Duke Medicine oncology faculty and staff. By storing a large portion of its collection off-site, the library was able to remove more stacks on the remaining stack level and convert them to user spaces, a long-term goal for the library. Additional space on the mezzanine level had to be converted to replace lost study and conference room spaces. While this project did not match the recommended space plans for the library, it underscored the need for the library to think creatively about the future of its facility and to work toward a more cohesive master plan.