We examine the relation between inventory investment and the cost of capital in the time series and the cross section. We find consistent evidence that risk premiums, rather than real interest rates, are strongly negatively related to future inventory growth at the aggregate, industry, and firm levels. The effect is stronger for firms in industries that produce durables rather than nondurables,...

The recently introduced Part IIIA of the Trade Practices Act 1974 establishes a legal regime under which third parties can in certain circumstances obtain a right of access to services provided by certain essential facilities on fair and reasonable grounds. The policy underlying the regime is set out in the report by the Independent Committee of Inquiry on National Competition Policy (the ‘Hilm...

before making decisions about the investment and financing the companies. it is necessary to know how the value of a company is determined. in this article three valuation methods are discussed: 1) value dirver method. 2) free cash flow method 3) economic value added method. in these methods the factors affecting the value of companies such as operating rate of return, cost of capital. amount o...

This paper presents a cost and performance measurement system that integrates the Activity-Based Costing (ABC) method with the Economic Value Added value-based financial performance measure. This proposed ABC-andEVA system is an engineering management tool that helps to successfully manage cost and capital. It allows enterprise leaders to create shareholder value through cost structure improvem...

This paper describes a field study which examines the implementation of an integrated ActivityBased Costing and Economic Value Added System in two small manufacturing firms. The results of this study suggest that this integrated approach outperforms both traditional cost accounting and standard Activity-Based Costing methods. Furthermore, the findings from two small companies show that the reli...

We examine the introduction of the voluntary filing program (VFP) by the Securities and Exchange Commission (SEC) for the introduction of XBRL (eXtensible Business Reporting Language), or Interactive Data as called in the US. XBRL is a machine-readable standardized format for financial reports. The VFP allowed firms to file annual and quarterly reports using XBRL. This program represents a quas...

Much work has been done on the impact of mergers and acquisitions on the shareholders of both acquiring and target firms (see Asquith et al. [1983], Bradley et al.[1988], Jarrell and Poulsen [1989], Jensen and Ruback [1983], and Travlos [1987]). Those studies generally indicate favorable stock price responses for target firms, and slight, to no, stock price response for acquiring firms. Recent ...

We propose a two-dimensional evaluation scheme for assessing the quality of implied cost of capital (ICC) estimates when price is noisy. Under fairly general assumptions, high-quality ICC estimates should: (a) better forecast future realized returns, and (b) better forecast future ICCs. Empirically, we compare seven alternative ICC estimates and show that several perform well along both dimensi...

I analyze the impact of a firm’s environmental profile on its cost of equity and debt capital. Using implied cost of capital derived from analysts’ earnings estimates, I find that investors demand significantly higher expected returns on stocks excluded by environmental screens (such as hazardous chemical, substantial emissions and climate change concerns) compared to firms without such environ...

* Earlier version presented at ASEM 98. Accepted to Engineering Management Journal. Abstract This article presents a cost and performance measurement system that integrates activity-based costing (ABC) with the economic value added financial performance measure. This proposed ABC-and-EVA system is a management support tool for managing cost and capital. The integrated ABC-and-EVA system include...