Harvard Corporate Governance

MAY 20, 2024

Posted by Lily Fang (INSEAD) and Sterling Huang (SMU), on Monday, May 20, 2024 Editor's Note: Lily Fang is a Professor of Finance at INSEAD and Sterling Huang is an Associate Professor of Accounting at Singapore Management University. This post is based on their recent article forthcoming in the Journal of Financial Economics.

Finance 135

Finance Firm Value 135

Reynolds Holding

MAY 18, 2022

In a recent paper , my coauthors and I examine voting on corporate policies when investors care about both maximizing firm value and achieving one or more social objectives. For example, under some technical conditions, corporate voting is effective when all investors share the same general goal (like maximizing firm value).

Firm Value 49

Firm Value Finance 49

Startup Valuation Blog

MARCH 13, 2023

"The bankruptcy of banks can have a ripple effect on the value of companies that work with the bank, and it's an aspect of valuation that cannot be ignored." A firm's value and the risk of the financial crisis that banks must deal with can have complicated and diverse relationships. Says Tamir Levy, Ph.D.,

Banking 100

Banking Firm Value Finance Equity 100

ThomsonReuters

DECEMBER 27, 2024

By understanding these regulations thoroughly, your firm can foster deeper relationships and move from transactional compliance work to a proactive advisory role. For example, advising a client on how to strategically sell a tokenized asset to minimize taxes could save them thousands, cementing your firms value beyond tax preparation.

Compliance 52

Compliance Fair Market Value Firm Value Marketability 52

Startup Valuation Blog

OCTOBER 12, 2021

Equitest is an Israeli fintech startup developing an online valuation platform that enables startups to manage and enhance their value with tools like business valuation calculator , business valuation software, pitch deck creator, and cap table management software. Tamir Levy : I own a finance Ph.D. Here is what he had to say.

Business Valuation 100

Business Valuation Start-ups Finance Firm Value 100

Equilest

JANUARY 8, 2023

The Modigliani-Miller theorem is a fundamental principle in finance that . describe the relationship between the capital structure of the firm and its value. . Their work was groundbreaking at the time and has had a lasting impact on finance. Suppose each firm produces an annual cash flow of 10 million USD.

Weighted Average Cost of Capital 40

Weighted Average Cost of Capital Business Valuation Capital Structure Debt Financing 40

Peak Business Valuation

MAY 14, 2023

We work with over 80 SBA lenders across the country that specialize in SBA financing for small businesses. By obtaining SBA financing for a construction business, you can lower your costs and increase profitability. SBA loans for a construction company are one of the best financing options to buy a construction business.

eCommerce 52

eCommerce Business Valuation Finance Accounting Firms 52

Musings on Markets

JANUARY 5, 2024

I have also developed a practice in the last decade of spending much of January exploring what the data tells us, and does not tell us, about the investing, financing and dividend choices that companies made during the most recent year. Financing Flows 5. Standard Deviation in Equity/Firm Value 2. Book Value Multiples 3.

Dividends 107

Dividends Risk Premium Equity Book Value 107

Reynolds Holding

AUGUST 2, 2022

Celebrated papers in the law and corporate finance literatures attribute lender influence during periods of distress to blue-sky contracting practices. [1] The result can be a debtor-in-possession financing agreement that appears to, and in a sense really does, give lenders the ability to drive a bankruptcy process. There is no escape.

Corporate Finance 64

Corporate Finance Equity Finance Enterprise Value 64

Reynolds Holding

MAY 26, 2022

Likewise, judges in cases involving corporate governance matters such as anti-takeover devices and fiduciary duties have cited those studies when assessing the consequences of different governance mechanisms for firm value. The second is to evaluate what happens to firms’ values after they adopt or remove a governance provision.

Firm Value 61

Firm Value Data Analysis Finance Marketability 61

Startup Valuation Blog

DECEMBER 15, 2021

The burn rate is when a new corporation uses up its venture capital to finance overhead before generating apparent cash movement from operations. As the burn rate is lower, the company is expected to survive for a more extended period, and therefore the firm's value is expected to be higher. Burn rate Of The Startup.

Start-ups 100

Start-ups Business Valuation Firm Value Marketability 100

Value Scope

JULY 21, 2020

The second inflection point was triggered by the “Fundamental Reshaping of Finance” open letter to CEOs on January 14, 2020, by Blackrock Chairman and Chief Executive Officer Larry Fink. “In Do ESG programs impact firm value? What about stock price? These are fair questions.

Intangible Assets 130

Intangible Assets Beta Alpha Unlevered Beta 130

Reynolds Holding

MAY 4, 2023

38] The trade-off between risk and return is nothing more than Finance 101. 39] ESG ratings are proprietary weighting schemes, often grounded in self-reported company data, published by for-profit firms angling for subscription revenue. Journal of Sustainable Finance and Investment, Available at SSRN: [link]. January 25, 2022).

Systematic Risk 90

Systematic Risk Finance Marketability Equity 90

Equilest

JANUARY 7, 2025

Similar to a house of cards in finance, one bad move can bring everything crashing down. By identifying earnings manipulation and guaranteeing more accurate firm values, this clever little technology is here to save the day. When valuations go haywire, that's what happens. Here's where things get interesting. and so on.

Business Valuation 40

Business Valuation Risk Premium Finance Start-ups 40

Reynolds Holding

NOVEMBER 6, 2023

Further, regardless of their merit, whistleblower claims may alert auditors and directors to the risk of potential misconduct, prompting them to spend more effort monitoring the firm’s financial reporting. Consistent with prior literature, we find a negative effect of meritorious whistleblower claims on firm value.

Firm Value 40

Firm Value Finance Marketability 40

RNC

AUGUST 22, 2023

One drawback is that conventional models, like the discounted cash flow analysis, might not effectively account for the features of startup firms. Valuing startups demands a strategy due to their high-risk nature and limited historical financial data. Read trending articles: What Is Equity Financing?

Discounted Cash Flow 52

Discounted Cash Flow Equity Equity Financing Business Valuation 52

RNC

AUGUST 15, 2023

One drawback is that conventional models, like the discounted cash flow analysis, might not effectively account for the features of startup firms. Valuing startups demands a strategy due to their high-risk nature and limited historical financial data. Read trending articles: What Is Equity Financing?

Equity 52

Equity Discounted Cash Flow Equity Financing Business Valuation 52

Andrew Stolz

AUGUST 6, 2020

This process helps the management invest in the assets that can maximize the firm’s value. It brings to light a potentially bad investment option, which, if avoided, helps to maximize the firm value. There are other internal factors that firms have to take into considerations. Capital Budgeting in Practice.

Net Present Value 52

Net Present Value Discounted Cash Flow Firm Value Business Valuation 52

Reynolds Holding

DECEMBER 11, 2022

Institutional Investors and Corporate Governance: The Incentives to Be Engaged, Journal of Finance 77, 213-264; Corum, A. Do Exogenous Changes in Passive Institutional Ownership Affect Corporate Governance and Firm Value? .” Journal of Corporation Law , forthcoming. [2] 2] Lewellen, J., Lewellen (2022). Malenko, and N.

Firm Value 94

Firm Value Finance Marketability Equity 94

Reynolds Holding

MAY 1, 2022

This has been a question of considerable interest in the accounting and finance literature because transparency is very important for a well-functioning takeover market.

Marketability 58

Marketability Firm Value Finance 58

Reynolds Holding

MARCH 21, 2024

Will firm value increase by appointing directors with mild non-financial concerns or with severe ones? Journal of Banking & Finance , 138, 106425. We also make predictions about the optimal board composition. Suppose the decision on liability protection has already been made.

Firm Value 45

Firm Value Banking Finance 45

Reynolds Holding

AUGUST 9, 2023

This evidence suggests that enhanced disclosure makes it easier for CEOs to search for jobs at other public firms or perhaps motivates them to move to private firms, where the disclosure requirements are less strict. Weisbach, 2012, Information disclosure and corporate governance, Journal of Finance 67, 195-233. Core, John E.,

Technology 40

Technology Firm Value Finance Equity 40

Startup Valuation Blog

MARCH 15, 2022

The burn rate is the rate at which a new corporation uses up its venture capital that will finance overhead before generating obvious cash movement from operations. As the burn rate is lower, the company is expected to survive for a longer period, and therefore the firm's value is expected to be higher.

Start-ups 100

Start-ups Marketability Business Enterprise Firm Value 100

Reynolds Holding

OCTOBER 6, 2024

In corporate governance, the focus is increasingly shifting toward non-financial stakeholders, particularly employees, as important contributors to a firm’s competitive advantage and long-term success. Historically, investment in labor has been a big topic in corporate finance, especially within agency theory.

Corporate Finance 53

Corporate Finance Firm Value Finance 53

Musings on Markets

JANUARY 6, 2023

Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive. Standard deviations in equity and firm value 4.

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Reynolds Holding

JULY 16, 2023

This possibility was first raised by Bhagat and Hubbard (2022) in their analysis of Nobel laureate Milton Friedman’s long-term firm value maximization hypothesis vis-à-vis the Business Roundtable’s stakeholder paradigm.

Marketability 40

Marketability Firm Value Finance 40

Reynolds Holding

SEPTEMBER 24, 2023

Besides the strength of the evidence underlying a potential claim, boards should consider the extent to which the issuer raises ongoing capital by selling stock in secondary offerings, issuing convertible debt, or engaging in other forms of financing that depend on the share price.

Marketability 45

Marketability Finance Firm Value 45

Reynolds Holding

SEPTEMBER 7, 2022

And, if so, can firms credibly commit to them? A starting point is to ask whether traditional firm-value maximizing arguments could compel managers and shareholders to credibly commit to reducing emissions. It is based on their recent paper, “Green Pills,” available here.

Start-ups 45

Start-ups Finance Firm Value Technology 45

Reynolds Holding

APRIL 18, 2022

We examine the trade-off between fostering innovation and protecting investors in the important context of young life-cycle firms, those whose current strategic priorities require significant capital investments financed through debt or equity issuances and whose operations are not yet profitable.

Intangible Assets 49

Intangible Assets Marketability Firm Value Finance 49

Reynolds Holding

DECEMBER 18, 2024

The revolutionary potential of artificial intelligence (AI) creates substantial uncertainty about its impact on firm value. Importantly, the increase occurred across all industries, reflecting the growing importance of AI in sectors like manufacturing, healthcare, finance, and retail. By 2023, this figure had risen to 20.02

Technology 45

Technology Firm Value Compliance Finance 45

Reynolds Holding

AUGUST 21, 2022

This assumption comports with the currently popular setting in economics and finance called Bayesian persuasion. To understand how this happens, imagine that, absent activists, management proposes projects that look good overall but involve some parts that are favored by management and hurt firm value (e.g.,

Finance 45

Finance Firm Value Marketability 45

Equilest

OCTOBER 13, 2022

Does the decision of who will pay the debt affect the company's value? One critical issue that is often not considered is whether deciding who will pay the debt - the buyer or the seller - affects the firm's value. The answer is positive. Another example is the case of costly equipment that would soon need to be replaced.

Business Valuation 40

Business Valuation Banking Firm Value Finance 40

Peak Business Valuation

SEPTEMBER 13, 2023

As such, having a strong management team can help your property management firm stay organized and efficient. This helps your firm stay on top of things like maintenance and repairs, property inspections, finances, etc… With a strong management team, your property management firm can maximize revenue and profitability.

Business Valuation 52

Business Valuation Appraisal Fair Market Value EBITDA 52

Equilest

SEPTEMBER 23, 2022

The firm needs to hire additional employees, purchase inventory, rent warehouses to house the merchandise, have offices where the employees will work, etc. In principle, there are two ways to finance the required investments in a firm - equity and foreign capital. All of these require cash. Sensitivity Analysis.

Business Valuation 40

Business Valuation Equity Finance Firm Value 40

Peak Business Valuation

SEPTEMBER 23, 2023

Consulting firms provide a wide range of services primarily to businesses, non-profits, and public sector agencies. We can expect the industry to continue to grow in the coming years.

Discounted Cash Flow 52

Discounted Cash Flow Business Valuation Appraisal EBITDA 52

Peak Business Valuation

JULY 19, 2023

These services may include advisory for human resources, finances, marketing, etc… As such, the consulting industry plays an important role in the economy. According to IBIS World , there are over 900,000 consulting firms in the United States.

Business Valuation 52

Business Valuation EBITDA Fair Market Value Appraisal 52

Equilest

OCTOBER 5, 2023

For example, if the firm serves clients from various industries like healthcare, finance, and manufacturing, it reduces the risk associated with industry-specific downturns. Employee Expertise and Talent Pool A skilled workforce is the lifeblood of an IT consulting firm. Client Portfolio Assessment Examine the client base.

Asset-based Approach 40

Asset-based Approach Business Valuation Compliance Technology 40