Relationship between franking credits and the market risk premium

In a dividend imputation tax system, equity investors have three potential sources of return: dividends, capital gains and franking (tax) credits. However, the standard procedures for estimating the market risk premium (MRP) for use in the capital asset pricing model, ignore the value of franking credits. Officer (1994) notes that if franking credits do affect the corporate cost of capital, their value must be added to the standard estimates of MRP. In the present paper, we explicitly derive the relationship between the value of franking credits (gamma) and the MRP. We show that the standard parameter estimates that have been adopted in practice (especially by Australian regulators) violate this deterministic mathematical relationship. We also show how information on dividend yields and effective tax rates bounds the values that can be reasonably used for gamma and the MRP. We make recommendations for how estimates of the MRP should be adjusted to reflect the value of franking credits in an internally consistent manner.

Moderating effect of allocentrism on the pay referent comparison-pay level satisfaction relationship

Pay referent comparisons (comparisons of one's salary to that of others) such as other-inside (salary of other people in the organisation), other-outside (the market rate), and cost-of- living, have been shown to influence pay level satisfaction. Bordia and Blau (1998) identified family as another referent that had a significant effect on pay level satisfaction in a sample of public and private sector employees in India. The finding was interpreted in view of the importance of family in collectivistic cultures. In the study reported here, the moderating influence of an individual differences variable, allocentrism-idiocentrism (the individual level conceptualisation of collectivism-individualism) on pay referent comparison-pay level satisfaction relationship was investigated. A sample of 146 employees from three public sector organisations in India participated in the study. In line with the predictions, results showed that after controlling for age, tenure, and pay level, pay referent comparisons explained more variance in pay level satisfaction for allocentrics than for idiocentrics. Family and pay level were stronger explanatory variables of pay level satisfaction for allocentrics and idiocentrics, respectively, while cost of living was a significant explanatory variable for both sub-groups.

Investigating the relationship between internet privacy concerns and online purchase behavior

Many organizations now emphasize the use of technology that can help them get closer to consumers and build ongoing relationships with them. The ability to compile consumer data profiles has been made even easier with Internet technology. However, it is often assumed that consumers like to believe they can trust a company with their personal details. Lack of trust may cause consumers to have privacy concerns. Addressing such privacy concerns may therefore be crucial to creating stable and ultimately profitable customer relationships. Three specific privacy concerns that have been frequently identified as being of importance to consumers include unauthorized secondary use of data, invasion of privacy, and errors. Results of a survey study indicate that both errors and invasion of privacy have a significant inverse relationship with online purchase behavior. Unauthorized use of secondary data appears to have little impact. Managerial implications include the careful selection of communication channels for maximum impact, the maintenance of discrete “permission-based” contact with consumers, and accurate recording and handling of data.

Is cannabis a gateway drug? Testing hypotheses about the relationship between cannabis use and the use of other illicit drugs

We outline and evaluate competing explanations of three relationships that have consistently been found between cannabis use and the use of other illicit drugs, namely, ( 1) that cannabis use typically precedes the use of other illicit drugs; and that ( 2) the earlier cannabis is used, and ( 3) the more regularly it is used, the more likely a young person is to use other illicit drugs. We consider three major competing explanations of these patterns: ( 1) that the relationship is due to the fact that there is a shared illicit market for cannabis and other drugs which makes it more likely that other illicit drugs will be used if cannabis is used; ( 2) that they are explained by the characteristics of those who use cannabis; and ( 3) that they reflect a causal relationship in which the pharmacological effects of cannabis on brain function increase the likelihood of using other illicit drugs. These explanations are evaluated in the light of evidence from longitudinal epidemiological studies, simulation studies, discordant twin studies and animal studies. The available evidence indicates that the association reflects in part but is not wholly explained by: ( 1) the selective recruitment to heavy cannabis use of persons with pre-existing traits ( that may be in part genetic) that predispose to the use of a variety of different drugs; ( 2) the affiliation of cannabis users with drug using peers in settings that provide more opportunities to use other illicit drugs at an earlier age; ( 3) supported by socialisation into an illicit drug subculture with favourable attitudes towards the use of other illicit drugs. Animal studies have raised the possibility that regular cannabis use may have pharmacological effects on brain function that increase the likelihood of using other drugs. We conclude with suggestions for the type of research studies that will enable a decision to be made about the relative contributions that social context, individual characteristics, and drug effects make to the relationship between cannabis use and the use of other drugs.

Electricity market price spike forecast with data mining techniques

Electricity market price forecast is a changeling yet very important task for electricity market managers and participants. Due to the complexity and uncertainties in the power grid, electricity prices are highly volatile and normally carry with spikes. which may be (ens or even hundreds of times higher than the normal price. Such electricity spikes are very difficult to be predicted. So far. most of the research on electricity price forecast is based on the normal range electricity prices. This paper proposes a data mining based electricity price forecast framework, which can predict the normal price as well as the price spikes. The normal price can be, predicted by a previously proposed wavelet and neural network based forecast model, while the spikes are forecasted based on a data mining approach. This paper focuses on the spike prediction and explores the reasons for price spikes based on the measurement of a proposed composite supply-demand balance index (SDI) and relative demand index (RDI). These indices are able to reflect the relationship among electricity demand, electricity supply and electricity reserve capacity. The proposed model is based on a mining database including market clearing price, trading hour. electricity), demand, electricity supply and reserve. Bayesian classification and similarity searching techniques are used to mine the database to find out the internal relationships between electricity price spikes and these proposed. The mining results are used to form the price spike forecast model. This proposed model is able to generate forecasted price spike, level of spike and associated forecast confidence level. The model is tested with the Queensland electricity market data with promising results. Crown Copyright (C) 2004 Published by Elsevier B.V. All rights reserved.

Learning orientation and market orientation: From an alliance perspective

The literature on market orientation has grown in significance during the past decade. Whilst there is more literature on market orientation, the literature on learning orientation is also starting to increase. Numerous researchers have studied and found support for the positive relationship between market orientation and learning orientation (eg Slater and Narver 1995). However, not many researchers have investigated the relationship that firms with a high learning orientation have a high market orientation (eg Sinkula, Baker and Noordewier 1997). This paper attempts to investigate that link in more detail. An alliance perspective is taken in understanding this relationship.