Optimal Age-Based Portfolios with Stochastic Investment Opportunity Sets

2006 ◽  
Author(s):  
Doriana Ruffino ◽  
Jonathan Treussard
Keyword(s):  
Investment Opportunity ◽  
Opportunity Sets

scholarly journals PERAN PROFITABILITAS DALAM MEMEDIASI PENGARUH FINANCIAL LEVERAGE DAN INVESTMENT OPPORTUNITY SET TERHADAP KEBIJAKAN DIVIDEN DI BURSA EFEK INDONESIA

2018 ◽  
pp. 143
Author(s):  
Ni Made Dewi Puspita Sari ◽  
I Gusti Bagus Wiksuana
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Secondary Data ◽  
Manufacturing Companies ◽  
Investment Opportunity ◽  
Financial Leverage ◽  
Opportunity Sets ◽  
Analysis Technique ◽  
Investment Opportunity Set

The purpose of this study was to determine the role of profitability in mediating the effect of financial leverage and investment opportunity set on the dividend policy. The populations in this study were manufacturing companies listed on the Indonesia Stock Exchange. The sampling of the research was done by census and the number of samples were 12 companies. The data of research were secondary data obtained from Indonesia Stock Exchange website and Indonesian Capital Market Directory from 2011 to 2015. Testing of research hypothesis was conducted by using path analysis technique by tool of SPSS application.The results showed that financial leverage has a negative and significant effect on dividend policy. Investment opportunity set has negative and insignificant effect on dividend policy. Financial leverage has a positive and significant impact on profitability. Investment opportunity sets also have a positive and significant impact on profitability. Profitability has a positive and significant effect on dividend policy. Profitability is able to mediate the effect of financial leverage and investment opportunity set on dividend policy.

The Determinants of Performance Plan Adoption

1995 ◽  
Vol 10 (3) ◽  
pp. 655-676 ◽  
Author(s):  
John A. Brozovsky ◽  
Parvez R. Sopariwala
Keyword(s):  
Executive Compensation ◽  
Agency Costs ◽  
Stock Options ◽  
Matched Pair ◽  
Logit Analysis ◽  
Investment Opportunity ◽  
Opportunity Sets ◽  
Long Term Performance ◽  
Term Performance

Executive compensation schemes are expected to reduce agency costs by aligning the interests of stockholders and managers. We attempt to determine the characteristics of companies that adopt long-term performance plans. Using a matched-pair design, we conduct a multivariate logit analysis that is weighted to take into account the choice-based nature of the sample. Our results suggest that performance plans may have been adopted to complement the inadequate compensation derived from stock options. In addition, we find that performance plans are more likely to be adopted by companies who have smaller investment opportunity sets and have older managers who are underinvesting in R&D expenditures.

Measuring multidimensional investment opportunity sets with 10-K text

2021 ◽  
Author(s):  
Sudipta Basu ◽  
Xinjie Ma ◽  
Hoa Briscoe-Tran
Keyword(s):  
Information Technology ◽  
Fixed Effects ◽  
Predictive Power ◽  
Investment Opportunity ◽  
Corporate Policies ◽  
Related Variation ◽  
Opportunity Sets ◽  
Dependent Variables ◽  
Out Of Sample ◽  
Specific Factors

We show that firms' investment opportunity sets (IOS) are multidimensional. Analyzing Form 10-K texts, we identify 445 unique keywords that predict firms' future investments during 1995-2009 and combine them into 43 underlying factors. Industry-specific factors include BioPharma, Banking, Information Technology, Oil & Gas and Retail Stores, while more general factors include Equity Intensity, Debt Intensity, Lease, Going Concern and Acquisition. These factors form our multidimensional measures of IOS. They outperform Tobin's Q and/or industry fixed effects, in predicting future out-of-sample (2010-15) investments and related corporate policies, and even inform incrementally over lagged dependent variables. We trace the factors' improved predictive power to their multidimensional nature, which captures IOS-related variation within and between industries, and stability in IOS that allows 10-K texts to be more informative.

scholarly journals Incentive Effects and Managerial Compensation Contracts: A Study of Performance Plan Adoptions

1992 ◽  
Vol 7 (2) ◽  
pp. 137-156 ◽  
Author(s):  
Jennifer J. Gaver
Keyword(s):  
Strategic Change ◽  
Stock Option ◽  
Managerial Compensation ◽  
Logit Analysis ◽  
Investment Opportunity ◽  
Compensation Contracts ◽  
Opportunity Sets ◽  
Long Term Performance ◽  
Term Performance

This study examines the relation between manager-shareholder agency costs and the decision to adopt a long-term performance plan. It is argued that firms with mature investment opportunity sets adopt performance plans to equate manager-shareholder planning horizons. It is also argued that firms undergoing strategic change adopt plans to reduce managerial exposure to risk. Logit analysis on a sample of 81 performance plan adoptions and a random sample of 78 nonadoptions indicates that firms with stagnant investment opportunity sets and firms undergoing strategic change tend to be performance plan adopters. There is also evidence that performance plan adopters have a higher incidence of lapsed stock option plans than nonadopters. Overall, the results indicate that there are systematic differences between performance plan adopters and non-adopters which appear to be related to the manager-shareholder agency problems faced by the firm.

Investment Opportunity Sets, Operating Uncertainty, and Capital Market Pressure: Determinants of Investments in Tax Shelter Activities?

2013 ◽  
Vol 36 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Sean T. McGuire ◽  
Thomas C. Omer ◽  
Jaron H. Wilde
Keyword(s):  
Capital Market ◽  
Tax Avoidance ◽  
Investment Strategy ◽  
Data Availability ◽  
Investment Behavior ◽  
Investment Opportunity ◽  
Opportunity Sets ◽  
Tax Shelter ◽  
Tax Shelters ◽  
Market Pressure

ABSTRACT Prior research documents substantial variation in firms' tax avoidance activities and questions why some firms choose not to take advantage of the apparent benefits of tax planning (i.e., the “undersheltering puzzle”). We provide additional insight into the undersheltering puzzle by investigating the decision to invest in a tax shelter from the perspective of a firm's overall investment strategy. We examine whether three factors associated with traditional investment behavior (firms' investment opportunity sets, operating uncertainty, and capital market pressure) are also associated with investments in tax shelter activities. Our results suggest that firms with large investment opportunity sets and higher operating uncertainty are less likely to invest in tax shelters. We also find that firms with greater capital market pressure are more likely to invest in tax sheltering activities. Overall, we find that factors that influence firms' investment behavior help to explain why more firms do not invest in tax shelters. Data Availability: All data used in this study are available from publicly available sources identified in the manuscript. JEL Classifications: H25, H26, M41

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