We explore the implications of directors' networks for company valuation in a concentrated ownership environment and in pyramidal control structures. Using common centrality indexes on a sample of 727 directors serving in 105 Israeli listed firms, we show that the effect is very dependent on the...

The treatment of goodwill, whether to capitalise or expense in the year of acquisition, has been a topic of debate over the last two decades. Since 1998, the Financial Reporting Standard (FRS 10) in the UK requires firms to capitalise purchased goodwill and amortise it through periodic charges...

This study investigates the relationship between managerial optimism, investment efficiency and firm valuation. This study follows the Campbell's measurement for managerial optimism and investigates the influences of the different levels of managerial optimism on improving investment efficiency...

We propose a dynamic version of the dividend discount model, solve it in closed-form, and assess its empirical validity. The valuation method is tractable and can be easily implemented. We find that our model produces equity value forecasts that are very close to market prices, and explains a...

In this short working paper I show a possible way of considering excess cash in firm valuation, using a simplified numerical example. Existing various theories about the "right" way to discount the debt's tax shield, I adopt Harris & Pringle theory which discounts the tax savings at the...

This paper examines the explanatory power of earnings in equity valuation and value relevance of earnings through a combination of cross-section and time series regression analysis. Cross-section models are based upon all US firms with a 31 December year-end in the Compustat files between 1960...

Measuring the value of labor-market hires for stock prices, be it underwriters when firms go public (IPOs) or chief executive officers (CEOs), is difficult due to selection. Opaque firms with higher costs of capital benefit more from prestigious underwriters, while productive firms benefit more...

We examine the impact of international venture capital investors on private firm success spanning 69 countries over the years 1995-2010. The data examined indicate that, relative to deals in which the investor base is purely domestic, private firms that have an international venture capital...

This paper examines the effect of investor power in a model of staged equity financing. It shows how the usual effect where market power reduces valuations can be reversed in later rounds. Once they become insiders, powerful investors may use their market power to increase, not decrease...