Investors use different approaches to select optimal portfolio. so, Optimal investment choices according to return can be interpreted in different models. The traditional approach to allocate portfolio selection called a mean - variance explains. Another approach is Markov chain. Markov chain is a random process without memory. This means that the conditional probability distribution of the nex...

In sharp contrast to the dominant real option valuation that assumes a stochastic process for an investment’s capital value, this paper demonstrates the valuation of a real option assuming that cash flow follows a stochastic process. We show that this method is at least equally effective and sometimes more intuitive. We note that, in a discounted cash flow (DCF) framework, only when certain con...

The main objective of this study was to investigate the effect of income smoothing on investors reaction to Earnings Persistence of companies listed on the Stock Exchange in Tehran. The population of the study was companies listed on the Stock Exchange in Tehran, the sample size due to screening method and after removing outliers is equal to 118 companies. In this study, earnings persistence an...

the main goal of this paper is determining the link between information asymmetry among equity investors and conservatism in financial reporting. becouse we argu that information asymmetry between equeity investors generates accounting conservatism in financial statements. conservatism reduces the manager's incentives and ability to manipulate accounting numbers and so reduces agency costs...

On December 15, 2010, after 11 months of legal standoff, the Swiss corporation Novartis finally closed a deal to acquire the remaining shares of eye-care company Alcon from minority shareholders. Why did it take almost a year? The acquisition had become a relatedparty transaction after Novartis purchased a 25% stake from then majority shareholder Nestlé and nominated some of its own directors t...

a r t i c l e i n f o Using high frequency intraday data, this paper investigates the herding behavior of institutional and individual investors in the Taiwan stock market. The study finds evidence of herding by both investors but a stronger herding tendency among institutional than among individual investors. Institutional investors herd more on firms with small capitalizations and lower turno...

This paper explores optimal ways for a firm to sell its initial public offering (IPO) to a mix of informed and uninformed investors through an intermediary. I argue that uninformed investors provide a benchmark for informed investors, resulting in an endogenous constraint that affects the issuer’s revenue. I conclude that higher revenues are achieved with higher numbers of uninformed investors ...

herd behavior by investors in capital markets is a behavioral bias that can cause to undesirable effects such as bubble, crash and high fluctuation in stock price. this anomalies can disturb the equilibrium relations in stock market and lead to market inefficiency. herd behavior is a condition that investors with rational or in rational reasons ignore private information and imitate from others...