In this paper we question the relevance, and assess the implications, of the practice in banking to use a uniform hurdle rate based on the cost of equity for the purposes of pricing and performance measurement. We examine three perspectives on this issue. First, we point to the potential...

The issue of hybrid instruments by firms is often justified on the grounds that these instruments allow issuers to achieve a lower cost of capital than would be the case under issues of straight debt and equity. In order to assess the validity of such claims it is necessary to examine the...

The past few years have seen high levels of growth in the use of hybrid financial securities by Australian corporations. The conventional explanation for this phenomenon has been that hybrid securities represent a highly flexible tool capable of deployment towards the end of reducing overall...

By convention, the quality of an audit is understood to relate to the joint probability that its conduct results in the detection and reporting of material financial statement errors. Early research into this phenomenon suggested a positive relationship between audit firm size and audit quality....

This paper reports on the life-time annual returns and volatility of the largest Australian five-star rated investment funds. Using this actual performance data, we model the likelihood that an investor would have viewed the actual performance as either positive or negative based upon the...

The event of a rising share price for a firm following the announcement of its intentions to acquire another firm is generally recognised as a sign of market support for the deal. If the price continues to rise over the offer period, as the market fully digests various items of information...

Merger and acquisition transactions are often explained and justified by reference to their potential capacity to generate value - for example through the achievement of operational synergies, critical scale or optimal scope. In contrast, a significant and growing literature questions the worth...

The adoption of IFRS based reporting in Australia for all reporting periods commencing 1 January 2005 onwards resulted in substantial variations to prior accepted reporting practices. One area in which change was particularly profound was in the shift to an impairment testing based regime for...

Data recently published by the Reserve Bank of Australia clearly demonstrates that after a period in abeyance, hybrid financial instruments have again become popular tools for capital raising and management. This raises several questions of practical and theoretical significance, particularly in...

This paper examines the important role of the Management Expense Ratio (MER) in fee disclosure, and why it is useful in assisting investors in the selection and retention of investment funds. Reporting on a study of 50 Australian investment funds, this paper identifies 17 different fee types...