Reconciling value estimates from the discounted cash flow model and the residual income model

This paper examines why practitioners and researchers get different estimates of equity value when they use a discounted cash flow (CF) model versus a residual income (RI) model. Both models are derived from the same underlying assumption -- that price is the present value of expected future net dividends discounted at the cost of equity capital -- but in practice and in research they frequently yield different estimates. We argue that the research literature devoted to comparing the accuracy of these two models is misguided; properly implemented, both models yield identical valuations for all firms in all years. We identify how prior research has applied inconsistent assumptions to the two models and show how these seemingly small errors cause surprisingly large differences in the value estimates. [ABSTRACT FROM AUTHOR]

Hypercapitalism: Language, new media and social perceptions of value

Using examples from contempoary policy and business discourses, and exemplary historical texts dealing with the notion of value, I put forward an argument as to why a critical scholarship that draws on media history, language analysis, philosophy and political economy is necessary to understand the dynamics of what is being called 'the global knowledge economy'. I argue that the social changes associated with new modes of value determination are closely associated with new media form.

Existence of a semicontinuous or continuous utility function: a unified approach and an elementary proof

In this paper, we present a new unified approach and an elementary proof of a very general theorem on the existence of a semicontinuous or continuous utility function representing a preference relation. A simple and interesting new proof of the famous Debreu Gap Lemma is given. In addition, we prove a new Gap Lemma for the rational numbers and derive some consequences. We also prove a theorem which characterizes the existence of upper semicontinuous utility functions on a preordered topological space which need not be second countable. This is a generalization of the classical theorem of Rader which only gives sufficient conditions for the existence of an upper semicontinuous utility function for second countable topological spaces. (C) 2002 Elsevier Science B.V. All rights reserved.

The non-existence of a utility function and the structure of non-representable preference relations

In this paper we investigate the structure of non-representable preference relations. While there is a vast literature on different kinds of preference relations that can be represented by a real-valued utility function, very little is known or understood about preference relations that cannot be represented by a real-valued utility function. There has been no systematic analysis of the non-representation problem. In this paper we give a complete description of non-representable preference relations which are total preorders or chains. We introduce and study the properties of four classes of non-representable chains: long chains, planar chains, Aronszajn-like chains and Souslin chains. In the main theorem of the paper we prove that a chain is non-representable if and only it is a long chain, a planar chain, an Aronszajn-like chain or a Souslin chain. (C) 2002 Published by Elsevier Science B.V.

On the importance function in splitting simulation

The splitting method is a simulation technique for the estimation of very small probabilities. In this technique, the sample paths are split into multiple copies, at various stages in the simulation. Of vital importance to the efficiency of the method is the Importance Function (IF). This function governs the placement of the thresholds or surfaces at which the paths are split. We derive a characterisation of the optimal IF and show that for multi-dimensional models the natural choice for the IF is usually not optimal. We also show how nearly optimal splitting surfaces can be derived or simulated using reverse time analysis. Our numerical experiments illustrate that by using the optimal IF, one can obtain a significant improvement in simulation efficiency.

What is the value of firms' prior knowledge? Building organisational knowledge capabilities

A firm's prior knowledge facilitates the absorption of new knowledge, thereby renewing a firm's systematic search, transfer and absorption capabilities. The rapidly expanding field of biotechnology is characterised by the convergence of disparate sciences and technologies. This paper, the shift from proteinbased to DNA-based diagnostic technologies, quantifies the value of a firm's prior knowledge and its relation to future knowledge development. Four dimensions of diagnostic and four dimensions of knowledge in biotechnology firms are analysed. A simple scaled matrix method is developed to quantify the positive and negative heuristic values of prior scientific and technological knowledge that is useful for the acquisition and absorption of new knowledge.

Investigation of electrical conductivity as a function of dopant-ion radius in the systems Zr0.75Ce0.08M0.17O1.92 (M=Nd, Sm, Gd, Dy, Ho, Y, Er, Yb, Sc)

Electrical conductivity versus dopant ionic radius studies in zirconia- and ceria-based, solid oxide fuel cell (SOFC) electrolyte systems have shown that oxygen-ion conductivity is highest when the host and dopant ions are similar in size [J. Am. Ceram. Soc. 48 (1965) 286; Solid State Ionics 37 (1989) 67; Solid State Ionics 5 (1981) 547]. Under these conditions, it is thought that the conduction paths within the crystal lattice become less distorted [Solid State Ionics 8 (1983) 201]. In this study, binary ZrO2-M2O3 unit cells were expanded, via the partial substitution of Ce+4 for Zr+4 into the lattice, in an attempt to identify new, ternary, zirconia/ceria-based electrolyte systems with enhanced electrical conductivity. The compositions Zr0.75Ce0.08M0.17O1.92 (M = Nd, Sm, Gd, Dy, Ho, Y, Yb, Sc) were prepared using traditional solid state techniques. Bulk phase characterisation and precise lattice parameter measurements were performed with X-ray diffraction techniques. Four-probe DC conductivity measurements between 400 and 900 degreesC showed that the dopant-ion radius influenced electrical conductivity. The conductivity versus dopant-ion radius trends previously observed in zirconia-based, binary systems are clearly apparent in the ternary systems investigated in this study. The addition of ceria was found to have a negative influence on the electrical conductivity over the temperature range 400-900 degreesC. It is suggested that distortion of the oxygen-ion conduction path by the presence of the larger M+3 and Ce+4 species (relative to Zr+4) is the reason for the decreasing electrical conductivity as a function of increasing dopant size and ceria addition, respectively. (C) 2002 Elsevier Science B.V. All rights reserved.

Impact of malocclusion and orthognathic reconstruction surgery on resonance and articulatory function: an examination of variability in five cases

Articulatory patterns and nasal resonance were assessed before and 6 months after orthognathic reconstruction surgery in five patients with dentofacial deformities. Perceptual and physiological assessments showed disorders of nasality and articulatory function preoperatively, two patients being hyponasal, and one hypernasal. Four patients had mild articulatory deficits, and four had reduced maximal lip or tongue pressures. Operation resulted in different patterns of change. Nasality deteriorated in three patients and articulatory precision and intelligibility improved in only one patient and showed no change in the other four. Operation improved interlabial pressures in three patients, while its impact on tongue pressures varied, being improved in one case, deteriorating in one, and remaining unchanged in the other three. The variability in the results highlights the need for routine assessment of speech and resonance before and after orthognathic reconstruction. (C) 2002 The British Association of Oral and Maxillofacial Surgeons. Published by Elsevier Science Ltd. All rights reserved.

The nexus of value chain integration and e-business applications on public sector agriculture R&D management

We examine the potential impact of interconnectivity of value chain partnerships through electronic means (e-business practices) on the management of Public Sector Agriculture R&D in Australia. We review the changing forms of managing research and development, the forces driving these changes, and R&D processes that are theoretically consistent with the move towards value chain involvement and the increase in active constituents in Public Sector Agriculture R&D. We then explore the potential of emerging e-business models to change the patterns of inter-connectivity, speed and omnipresence of partners in the value chain. Three e-business R&D management practices are identified that provide the prerequisite flexibility necessary to take advantage of opportunistic markets. These R&D business practices are: compressing R&D to reduce time to market, fostering co-development to enter a market at the last moment and building flexible products that allow adjustment at the last possible moment. Some fundamental reallocation of existing resources will be required to meet these markets. Implications of these e-business practices for R&D management are discussed.

Boundary value problems for systems of difference equations associated with systems of second-order ordinary differential equations

We study difference equations which arise as discrete approximations to two-point boundary value problems for systems of second-order ordinary differential equations. We formulate conditions which guarantee a priori bounds on first differences of solutions to the discretized problem. We establish existence results for solutions to the discretized boundary value problems subject to nonlinear boundary conditions. We apply our results to show that solutions to the discrete problem converge to solutions of the continuous problem in an aggregate sense. (C) 2002 Elsevier Science Ltd. All rights reserved.

Existence of multiple solutions for second-order discrete boundary value problems

We give conditions on f involving pairs of discrete lower and discrete upper solutions which lead to the existence of at least three solutions of the discrete two-point boundary value problem yk+1 - 2yk + yk-1 + f (k, yk, vk) = 0, for k = 1,..., n - 1, y0 = 0 = yn,, where f is continuous and vk = yk - yk-1, for k = 1,..., n. In the special case f (k, t, p) = f (t) greater than or equal to 0, we give growth conditions on f and apply our general result to show the existence of three positive solutions. We give an example showing this latter result is sharp. Our results extend those of Avery and Peterson and are in the spirit of our results for the continuous analogue. (C) 2002 Elsevier Science Ltd. All rights reserved.