The Australasian Accounting Business & Finance Journal, February 2007 Gaffikin: Accounting Research and Theory: the age of neo-empiricism. Vol. 1, No.1.pp. 1-19. Accounting Research and Theory: The age of neo-empiricism Michael Gaffikin, School of Accounting & Finance, University of Wollongong ABSTRACT The theorising in accounting prior to 1970 was rejected as not providing sufficiently general theories. Informed by theories in economics and finance (and other disciplines such as psychology)
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Suggested Solution to Homework 4, part 1 and part 2 Chapter 11 7.(20 points) The following effects seem to suggest predictability within equity markets and thus disprove the Efficient Market Hypothesis. However, consider the following: a. Multiple studies suggest that “value” stocks (measured often by low P/E multiples) earn higher returns over time than “growth” stocks (high P/E multiples). This could suggest a strategy for earning higher returns over time. However, another rational argument may
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the consistency between Greenblatt model and Piotroski screen method in picking excellent value stocks. Data We chose 30 stocks from magicformulainvesting.com which get the highest score in value stocks the website gives us. We download the fundamental data of each company from Bloomberg. Methodology First we use Greenblatt’s method to pick the best value stock. We calculate Return On Capital(ROC) using these formulas: ROC = EBIT/(Net Working Capital + Net Fixed Assets) In which, Net
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Statement of Investment Objectives We at Griffin Capital Management aim to provide excellent returns to our investors by minimizing volatility risk and exceeding the performance of the S&P 500 plus five percentage points. The two main objectives of our portfolio managers are to provide consistent returns and protect our investors from the loss of capital. Due to asset allocation restrictions, this portfolio will not hold any ETFs, bonds, mutual funds, and derivatives. Although these restrictions
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reformulate an asset-pricing model (RAPM) to demonstrate why firm characteristics help to explain stock returns. Design/methodology/approach – The RAPM is grounded in an economic setting where two groups of agents hold different beliefs about firm fundamental values, and the more sophisticated ¨ group (rationals) adopts contrarian strategies against the naıve group (quasis). The model is derived in a static equilibrium within the consumption-investment framework with heterogeneous agents. Findings –
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Tyler Reames October 14, 2013 American Greetings Executive Summary – FIN 3717 Executive Summary American Greetings is the second largest greeting card publisher in the U.S., behind Hallmark. The company is involved in retail and online sales. Hallmark is the main competition for American Greetings. In recent years, social media has caused a decline in the greeting card industry. Both American Greetings and Hallmark have begun creating electronic cards to take advantage of the digital
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Homework 2 1. ABC earned a net profit margin of 6.7% last year and had an equity multiplier of 3.5. If its total assets are $97 million and its sales are 171 million, what is the firm's return on equity? Enter your answer in percentages rounded off to two decimal points. Answer: Net profit margin = Net profit / sales Sales = 171 million Net profit margin = 6.7% Net profit = 171 * 6.7% = 11.46 million Equity multiplier = Total assets/ shareholders equity 3.5 = 97 / shareholders’ equity
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11/2/2011 Corporate Finance Efficient Market Hypothesis Reading: Chapter13, BMAM IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM 1 Relationship among Three Different Information Sets All information relevant to a stock Information set of publicly available information Information set of past prices 13-2 IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM 1 11/2/2011 The Different Types of Market Efficiency • Weak Form – Security prices reflect all information found in past
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outstanding investment returns (Klarman 2001). The investment strategy was described by Benjamin Graham and David Dodd in their book, Security Analysis (1940, p. 724). Over subsequent decades the investment approach has evolved utilizing varying fundamental methodologies but always maintaining the principle of investing when a discount to intrinsic value exists. Graham and Dodd (1940, p. 368) referred to this principle as the 'margin of safety'. This essay will explore the various methodologies, expand
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Case Study Summary (SAUDI STOCK MARKET) The purpose of this article is to illustrate a simple and easy method to identify undervalued stocks in Saudi Stock Market to enable the investors for making well informed and conscious investment decisions. Actually, Investing is the act of committing money or capital to an endeavour with the expectation of obtaining an additional income or profit. True investing doesn't happen without some action on our part. A "real" investor does not simply throw his
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