Agency, Financial Flexibility, and Firm Value: Evidence from REITs

We show empirically that the use of unsecured debt, whose standard covenants commit management to the preservation of debt capacity, leads to lower and more stable leverage. We then show that firm value is sensitive to leverage levels and leverage stability, decreasing in the former and increasing in the latter. Our results support a liquidity-centric version of Jensen's (1986) free cash flow argument. In this version, self-serving managerial tendencies are reigned in without raising leverage indiscriminately, so that financial flexibility is preserved.

Ability of Gordonia alkanivorans strain 1B for high added value carotenoids production

Currently, carotenoids are valuable bioactive molecules for several industries, such as chemical, pharmaceutical, food and cosmetics, due to their multiple benefits as natural colorants, antioxidants and vitamin precursors. Hence, the increasing interest on these high added-value products has led to the search of alternatives, more cost-effective and with better yields, towards their industrial production. Indeed, microbial metabolism offers a promising option for carotenoids production. Herein it is shown the potential of the dibenzothiophene desulfurizing bacterium Gordonia alkanivorans strain 1B as a high carotenoid-producer microorganism. The novel carotenoids, produced under different culture conditions, were extracted with DMSO and then further analyzed both through spectrophotometry and HPLC. When grown in glucose-sulfate-light, strain 1B was able of achieving 2015 g carotenoids per g DCW in shake-flask assays, with about 60% corresponding to lutein, canthaxanthin and astaxanthin. Further optimization studies open a new focus of research aiming to get a hyper pigment-producer strain that may be applied towards different industrial sectors.

Added value of diffusion-weighted MRI in detection of cervical cancer recurrence compared with morphologic and dynamic contrast-enhanced MRI sequences

PURPOSE We aimed to evaluate the added value of diffusion-weighted imaging (DWI) to standard magnetic resonance imaging (MRI) for detecting post-treatment cervical cancer recurrence. The detection accuracy of T2-weighted (T2W) images was compared with that of T2W MRI combined with either dynamic contrast-enhanced (DCE) MRI or DWI. METHODS Thirty-eight women with clinically suspected uterine cervical cancer recurrence more than six months after treatment completion were examined with 1.5 Tesla MRI including T2W, DCE, and DWI sequences. Disease was confirmed histologically and correlated with MRI findings. The diagnostic performance of T2W imaging and its combination with either DCE or DWI were analyzed. Sensitivity, positive predictive value, and accuracy were calculated. RESULTS Thirty-six women had histologically proven recurrence. The accuracy for recurrence detection was 80% with T2W/DCE MRI and 92.1% with T2W/DWI. The addition of DCE sequences did not significantly improve the diagnostic ability of T2W imaging, and this sequence combination misclassified two patients as falsely positive and seven as falsely negative. The T2W/DWI combination revealed a positive predictive value of 100% and only three false negatives. CONCLUSION The addition of DWI to T2W sequences considerably improved the diagnostic ability of MRI. Our results support the inclusion of DWI in the initial MRI protocol for the detection of cervical cancer recurrence, leaving DCE sequences as an option for uncertain cases.

Three essays on corporate taxation : financial reporting, value, and firm creation

Doutoramento em Gestão

Sino-African State Trading in Services: Added-Value through Angola-Model loaning, GATS commitments or FTAs?

Paper presented by Charlotte Sieber-Gasser at the 5th Annual TRAPCA Conference, Arusha (Tanzania), 25-26 November 2010. Despite the increasing volume of trade between China and African countries, not one single conventional free trade agreement (FTA) or economic partnership agreement (EPA) has yet been signed between an African country and China. Initially, Sino-African trade relations were to a very large extent centred on investments secured through bilateral investment agreements (BITs). The more recent Chinese investments on the African continent, however, are more informally based on FDI contracts with the state at the receiving end and a government-owned private company as the investor, or loosely attached to loans commonly known under term ‘the Angola-Model’. This rather unusual basis for economic integration and development assistance, outside the trodden path of free trade agreements and ODA, requires further analysis in order to understand how the current legal framework between China and the African continent impacts economic development and national sovereignty, and what kind of distributive consequences it may have.

Determinants Of Firm Terminal Value: The Perspective Of North American And European Financial Analysts

Company valuation models attempt to estimate the value of a company in two stages: (1) comprising of a period of explicit analysis and (2) based on unlimited production period of cash flows obtained through a mathematical approach of perpetuity, which is the terminal value. In general, these models, whether they belong to the Dividend Discount Model (DDM), the Discount Cash Flow (DCF), or RIM (Residual Income Models) group, discount one attribute (dividends, free cash flow, or results) to a given discount rate. This discount rate, obtained in most cases by the CAPM (Capital asset pricing model) or APT (Arbitrage pricing theory) allows including in the analysis the cost of invested capital based on the risk taking of the attributes. However, one cannot ignore that the second stage of valuation that is usually 53-80% of the company value (Berkman et al., 1998) and is loaded with uncertainties. In this context, particular attention is needed to estimate the value of this portion of the company, under penalty of the assessment producing a high level of error. Mindful of this concern, this study sought to collect the perception of European and North American financial analysts on the key features of the company that they believe contribute most to its value. For this feat, we used a survey with closed answers. From the analysis of 123 valid responses using factor analysis, the authors conclude that there is great importance attached (1) to the life expectancy of the company, (2) to liquidity and operating performance, (3) to innovation and ability to allocate resources to R&D, and (4) to management capacity and capital structure, in determining the value of a company or business in long term. These results contribute to our belief that we can formulate a model for valuating companies and businesses where the results to be obtained in the evaluations are as close as possible to those found in the stock market

Added value from biomass by broader utilization of fuels and CHP plants

The present work, where additional value-creating processes in existing combined heat and power (CHP) structures have been examined, is motivated by a political- and consumer-driven strive towards a bioeconomy and a stagnation for the existing business models in large parts of the CHP sector. The research is based on cases where the integration of flash pyrolysis for co-production of bio-oil, co-gasification for production of fuel gas and synthetic biofuels as well as leaching of extractable fuel components in existing CHP plants have been simulated. In particular, this work has focused on the CHP plants that utilize boilers of fluidized bed (FB) type, where the concept of coupling a separate FB reactor to the FB of the boiler forms an important basis for the analyses. In such dual fluidized bed (DFB) technology, heat is transferred from the boiler to the new rector that is operating with other fluidization media than air, thereby enabling other thermochemical processes than combustion to take place. The result of this work shows that broader operations at existing CHP plants have the potential to enable production of significant volumes of chemicals and/or fuels with high efficiency, while maintaining heat supply to external customers. Based on the insight that the technical preconditions for a broader operation are favourable, the motivation and ability among the incumbents in the Swedish CHP sector to participate in a transition of their operation towards a biorefinery was examined. The result of this assessment showed that the incumbents believe that a broader operation can create significant values for their own operations, the society and the environment, but that they lack both a strong motivation as well as important abilities to move into the new technological fields. If the concepts of broader production are widely implemented in the Swedish FB based CHP sector, this can substantially contribute in the transition towards a bioeconomy.

Valorization of bio-alcohols into added value chemicals

The present research work focused on the valorisation and upgrading of bio-ethanol over heterogeneous catalysts in a lab-scale continuous gas-flow system. In the Unibo laboratories, catalytic tests have been carried out in the temperature range 300-600°C by feeding an ethanol/He mixture in the reactor. After choosing the reaction conditions, ion-exchanged hydroxyapatite with transition metals (i.e., Fe, Cu) and alkaline earth metal (i.e., Sr) have been synthesized and tested. The Sr-HAP catalyst led to the formation of a complex reaction mixture the composition of which need further optimization in order to fill the requisite to be used as fuel-blend. Then, some zirconium-oxide based catalysts have been prepared through two different methods, precipitation and hydrothermal, by varying some synthetic parameters (i.e., pH, the nature of the base) and by adding a transition metal as dopant agent (i.e., Ti and Y). The presence of a dopant into the zirconia structure favoured the stabilization of the tetragonal or cubic phase against the monoclinic one. Interestingly, 5%mol Ti-doped zirconia exhibited a different catalytic behaviour yielding diethyl ether as major product at 300°C, while all the others samples produced mainly ethylene. Then, the effect of acid-base properties of sepiolite, using alkali metals (i.e., Na, K, Cs) with different metal loading (i.e., 2, 4, 5, 7, 14 wt%) as promoters, and of the redox properties of sepiolite-supported CuO or NiO, on the catalytic conversion of ethanol into n-butanol has been investigated. Thermal treated sepiolite samples mainly acted as acid catalyst, yielding preferentially the dehydration products of ethanol (ethylene and diethyl ether). Best results in terms of activity (ethanol conversion, 59%) and n-butanol selectivity (30%) where obtained at 400ºC and a contact time, W/F, of 2 g/mL·s over the catalyst consisting of sepiolite calcined at 500ºC modified with 7 wt% of cesium.

Multicollinearity and financial constraint in investment decisions: a Bayesian generalized ridge regression

This paper addresses the investment decisions considering the presence of financial constraints of 373 large Brazilian firms from 1997 to 2004, using panel data. A Bayesian econometric model was used considering ridge regression for multicollinearity problems among the variables in the model. Prior distributions are assumed for the parameters, classifying the model into random or fixed effects. We used a Bayesian approach to estimate the parameters, considering normal and Student t distributions for the error and assumed that the initial values for the lagged dependent variable are not fixed, but generated by a random process. The recursive predictive density criterion was used for model comparisons. Twenty models were tested and the results indicated that multicollinearity does influence the value of the estimated parameters. Controlling for capital intensity, financial constraints are found to be more important for capital-intensive firms, probably due to their lower profitability indexes, higher fixed costs and higher degree of property diversification.

A randomized controlled trial of acupuncture added to usual treatment for fibromyalgia

Objective: To evaluate the effectiveness of acupuncture for fibromyalgia. Methods: Fifty-eight women with fibromyalgia were allocated randomly to receive either acupuncture together with tricyclic antidepressants and exercise (n = 34), or tricyclic antidepressants and exercise only (n=24). Patients rated their pain on a visual analogue scale. A blinded assessor evaluated both the mean pressure pain threshold value over all 18 fibromyalgia points and quality of life using SF-36. Results: At the end of 20 sessions, patients who received acupuncture were significantly better than the control group in all measures of pain and in 5 of the SF-36 subscales. After 6 months, the acupuncture group was significantly better than the control group in numbers of tender points, mean pressure pain threshold at the 18 tender points and 3 subscales of SF-36. After one year, the acupuncture group showed significance in one subscale of the SF-36; at 2 years there were no significant differences in any outcome measures. Conclusion: Addition of acupuncture to usual treatments for fibromyalgia may be beneficial for pain and quality of life for 3 months after the end of treatment. Future research is needed to evaluate the specific effects of acupuncture for fibromyalgia.

Introduction to Discounted Cash Flow Analysis and Financial Functions in Excel

The financial and economic analysis of investment projects is typically carried out using the technique of discounted cash flow (DCF) analysis. This module introduces concepts of discounting and DCF analysis for the derivation of project performance criteria such as net present value (NPV), internal rate of return (IRR) and benefit to cost (B/C) ratios. These concepts and criteria are introduced with respect to a simple example, for which calculations using MicroSoft Excel are demonstrated.

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]