We apply to the concrete setup of a bank engaged into bilateral trade portfolios the XVA theoretical framework of Albanese and Crépey (2017), whereby so-called contra-liabilities and cost of capital are charged by the bank to its clients, on top of the fair valuation of counterparty risk, in order to account for the incompleteness of this risk. The transfer of the residual reserve credit capita...

I build a model of neoclassical production to examine the capital market and welfare effects of a uniform accounting standard (like IFRS). Firms vary in their cost of compliance to the standard, and investors vary in their cost of learning diverse standards for capital allocation. I show that a uniform accounting standard increases the quantity of capital in the economy and lowers the cost of c...

This paper investigates the impact of the firm’s accounting information and, especially the role of earnings quality, on its cost of capital and how this influences excess returns. The analysis extends prior works by investigating how components of accounting information and, especially earnings quality, affect stock returns through their effect on the cost of capital. The empirical approach us...

In this paper an efficient three- stage algorithm is developed for software production cost and time estimation. First stage includes a hybrid model composed of COCOMO and Function Points methods to increase estimation accuracy. Second stage encompasses paired comparisons matrix of analytical hierarchy process to determine amount of any resources consumed in each step of software production by ...

Agency cost theory is an important branch of capital structural theory. Free cash flow has significant impact on agency cost. The combination of research on these two fields would help to build and extend the theoretical system. Based on agency cost theory, the present study firstly categorized the characteristics of free cash flow as well as the statistical methodologies. Furthermore, the exis...