A Prospect Theory Explanation of the Disposition to Trade Losing Investments for Less Than Market Price

2002 ◽  
Vol 90 (3) ◽  
pp. 851-857
Author(s):  
D. J. Johnstone
Keyword(s):  
Prospect Theory ◽  
Market Price ◽  
Market Value ◽  
Mental Accounting ◽  
New Venture ◽  
Open Market ◽  
Psychological Benefits ◽  
Sale Price ◽  
Monetary Loss ◽  
Mental Integration

Investors have a proven general reluctance to realize losses. The theory of “mental accounting” suggests that losses are easier to accept when mentally integrated with either preceding losses or with compensatory gains. Mental integration is made easier when a failed asset is exchanged against a new, apparently profitable, acquisition. The alternative is to sell the existing asset on the open market before re-investing the proceeds as desired. This is emotionally less appealing than “rolling over” a losing investment into a new venture by way of an asset trade. The psychological benefits of exchanging rather than selling a failed asset come at a cost. It is typical of trade-in arrangements, e.g., where one trades an old car against a new one, that the effective sale price of the existing asset is less than current market value. Acceptance of this low price adds to the investor's total monetary loss on the existing asset but is essential to an overall package deal apart from which that asset would often remain belatedly unsold.

Factors having effects on market value of Welsh Black Cattle in pedigree sales, variance components and estimation of breeding values of sale price

1998 ◽  
Vol 1998 ◽  
pp. 192-192 ◽  
Author(s):  
Z. Ulutas ◽  
I. Ap Dewi ◽  
M. Saatci
Keyword(s):  
Variance Components ◽  
Market Price ◽  
Market Value ◽  
Physical Characteristics ◽  
Pedigree Data ◽  
Sale Price ◽  
Breeding Values ◽  
Cattle Breeders

Few Welsh Black Cattle breeders record their animals as part of formal selection schemes. However there are sale and pedigree data available on Welsh Black Cattle as recorded by the breed society. The aim of the current project was to examine the use of market price as a basis for selection. This is justified on the basis that detailed production records are not available and that price could be considered as an indicator that summarises physical characteristics.

Factors having effects on market value of Welsh Black Cattle in pedigree sales, variance components and estimation of breeding values of sale price

1998 ◽  
Vol 1998 ◽  
pp. 192-192
Author(s):  
Z. Ulutas ◽  
I. Ap Dewi ◽  
M. Saatci
Keyword(s):  
Variance Components ◽  
Market Price ◽  
Market Value ◽  
Physical Characteristics ◽  
Pedigree Data ◽  
Sale Price ◽  
Breeding Values ◽  
Cattle Breeders

Few Welsh Black Cattle breeders record their animals as part of formal selection schemes. However there are sale and pedigree data available on Welsh Black Cattle as recorded by the breed society. The aim of the current project was to examine the use of market price as a basis for selection. This is justified on the basis that detailed production records are not available and that price could be considered as an indicator that summarises physical characteristics.

PENGARUH IT SPENDING TERHADAP KINERJA PERUSAHAAN PADA PERUSAHAAN TELEKOMUNIKASI YANG TERDAFTAR DI BURSA EFEK SELURUH ASIA TENGGARA PADA TAHUN 2009-2011

MODUS ◽  
2016 ◽  
Vol 26 (2) ◽  
pp. 93
Author(s):  
Irene Adrayani
Keyword(s):  
Stock Price ◽  
Sampling Method ◽  
Capital Expenditure ◽  
Stock Exchange ◽  
Market Price ◽  
Market Value ◽  
Company Performance ◽  
Corporate Value ◽  
Accounting Information System ◽  
Company Value

This study aims to get empirical evidence about the infuence of IT spending on corporate value by testing the efect of IT spending on corporate value by using Tobin’s Q. Te higher the stock price, the higher the company value as well as investors’ assessment. The market price of the company’s stocks refects investors’ assessment of the overall equity held. Of the stock price refects investor can provide an assessment of a company. Tobin’s Q is the ratio of the market value of the company’s assets as measured by the market value of the outstanding stocks and debt (enterprise value) to the replacement cost of the assets of the company. The sampling method is based on purposive sampling method with the purpose to obtain a sample that meets the criteria. Tis study used a sample taken from a telecommunications company listed on the Stock Exchange throughout Southeast Asia during the period of 2009-2011. The hypothesis in this study was tested using simple regression. Based on data analysis, the result that the variable IT spending does not afect the company value.Keywords: accounting information system, Tobin’s Q, IT spending, capital expenditure, company performance

scholarly journals STUDI PRAKTIK EARNINGS MANAGEMENTPADA PERUSAHAAN YANG MELAKUKAN INITIAL PUBLIC OFFERINGDI BURSA EFEK JAKARTA

2016 ◽  
Vol 5 (3) ◽  
pp. 313
Author(s):  
Akhmad Riduwan
Keyword(s):  
Initial Public Offering ◽  
Market Price ◽  
Open Market ◽  
Price Information ◽  
Public Offering

Saat melakukan penawaran saham perdana (Initial Public Offering atau disingkat IPO) adalah saat yang penting bagi perusahaan. Harga perdana saham mempunyai dampak yang signifikan terhadap perusahaan yang mengeluarkan sekuritas (issuers). Kas yang diperoleh dari pasar perdana ini, oleh issuersdapat dinikmati secara langsung. Hasil penjualan saham masuk ke perusahaan sebagai dana segar yang bisa tak terbatas jum-lahnya dibandingkan surat hutang, tergantung pada prospek perusahaan di masa men-datang di mata investor. Seringkali harga perdana ditetapkan berdasarkan informasi non harga (non-price information). Metode yang paling lazim digunakan underwriters dan investor untuk menilai saham perdana adalah dengan menggunakan pendekatan perusa-haan-perusahaan yang dapat diperbandingkan (comparable-firms approach). Pendekat-an ini menggunakan price-earning ratioperusahaan-perusahaan yang dapat diperban-dingkan sebagai penentu awal (yang dianggap mewakili open market price) untuk kemu-dian dikalikan dengan earnings perusahaan yang akan menawarkan saham perdananya. Oleh karenanya, informasi earnings yang disampaikan sebelum perusahaan menawarkan saham perdananya memegang peranan yang sangat penting untuk mendongkrak harga saham perdana.Alasan di atas cukup kuat untuk sampai pada dugaan bahwa issuers mungkin saja mela-kukan earnings managementdengan meninggikan laba dan melaporkannya pada infor-masi yang dipublikasikan sebelum penawaran saham perdananya untuk mendapatkan insentif dari pasar modal. Kajian tentang hal tersebut memberikan bukti bahwa manajer mengatur earnings pada saat mendekati penawaran perdana (penelitian oleh Friedlan 1994, Shivakumar 2000).Kebanyakan investor yang menggunakan informasi pada prospektus sebagai satu-satunya sumber informasi yang mudah dan murah, akan sangat mudah terpengaruh oleh pilihan-pilihan kebijakan akuntansi issuers dalam rangka earnings management.Penelitian ini mengkaji kemungkinan perusahaan-perusahaan yang melakukan penawar-an saham perdananya di Bursa Efek Jakarta mengatur earnings sedemikian rupa dan meng-informasikannya melalui prospektus dengan tujuan mencapai harga perdana yang setinggi-tingginya. Setelah itu, perusahaan mengembalikan earnings ke tingkat semula.

scholarly journals PREÇO MÍNIMO DE VENDA DA MADEIRA DE EUCALIPTO PARA OS SEGMENTOS DE CARVÃO E SERRARIA

Nativa ◽  
2018 ◽  
Vol 6 (5) ◽  
pp. 526
Author(s):  
Luis Carlos de Freitas ◽  
Wilmerson Bernardino Prado ◽  
Aline Pereira das Virgens ◽  
Danusia Silva Luz ◽  
Ana Carolina Dantas Moreira
Keyword(s):  
Market Price ◽  
Selling Price ◽  
Average Increase ◽  
Sale Price ◽  
Annual Average ◽  
Eucalyptus Wood ◽  
Project Costs ◽  
The Interest Rate ◽  
The Cost ◽  
Standing Timber

Objetivou-se neste trabalho avaliar o preço mínimo de venda de madeira de eucalipto com reflorestamentos destinados aos segmentos de carvão e serraria. O preço mínimo foi determinado através dos dados de custos e receitas dos empreendimentos. Os custos dos projetos foram descontados para o ano zero, somados e igualados a receita, também descontada para o ano zero.  A receita foi expressa pelo produto do Incremento Médio Anual, idade de corte, e preço mínimo de venda da madeira. Foram obtidos os seguintes preços mínimos de venda para madeira: carvão (R$ 38,44 para madeira em pé e R$ 55,39 para madeira empilhada); serraria (R$ 29,76 para madeira em pé e R$57,71 para madeira empilhada). Os valores encontrados foram inferiores ao preço de mercado, evidenciando que o custo de produção da madeira foi totalmente assegurado pelo seu preço de venda, proporcionando ainda um adicional de receita para cada metro cúbico comercializado. A análise de sensibilidade mostrou grande influência da taxa de juros no preço mínimo de venda da madeira, diferentemente do que foi observado para o custo anual de arrendamento da terra. Os resultados da pesquisa mostram importância ao nortear produtores florestais em relação aos preços de comercialização de produtos.Palavras-chave: planejamento econômico, projetos florestais, custo de madeira. MINIMUM SALE PRICE OF EUCALYPT TIMBER CONSIDERING REFORESTATION TO VEGETAL COAL PRODUCTION AND SAWMILL ABSTRACT:The objective of this study was to evaluate the minimum selling price of eucalyptus wood with reforestation for the coal and sawmill segments. The minimum price was determined by the cost and revenue data of the projects. Project costs were discounted for year zero, plus and equal to revenue, also discounted for year zero. Revenue was expressed as the product of the Annual Average Increase, age of cut, and minimum selling price of the wood. The following minimum selling prices were obtained for wood: coal (R $ 38.44 for standing timber and R $ 55.39 for stacked timber); (R $ 29.76 for standing timber and R $ 57.71 for timber stacked). The values found were lower than the market price, evidencing that the cost of production of the wood was fully assured by its selling price, also providing an additional revenue for each cubic meter marketed. The sensitivity analysis showed a large influence of the interest rate on the minimum selling price of the wood, unlike what was observed for the annual cost of renting the land. The results of the survey show importance when guiding forest producers in relation to the prices of products commercialization.Keywords: economic planning, forestry projects, timber cost.

Finding $3.336 Trillion in Housing Capital

2017 ◽  
Author(s):  
Yue Chim Richard Wong
Keyword(s):  
Market Value ◽  
Open Market

If the restriction on selling TPS and HOS units on the open market were removed or the unpaid land premiums substantially lowered, then an active market would appear. They would then become an important source of new housing capital. Such privatization of public rental units and deregulation of sale restrictions on ownership units would substantially enhance the market value of government housing.

Pension plan funding and market value of the firm: the Portuguese case

2020 ◽  
Vol 47 (4) ◽  
pp. 827-847
Author(s):  
Maria Teresa Medeiros Garcia ◽  
José Amílcar Neves Domingos
Keyword(s):  
Market Price ◽  
Market Value ◽  
Pension Plan ◽  
The United States ◽  
Stock Index ◽  
Occupational Pension ◽  
Cross Sectional ◽  
Variable Effect ◽  
Content Type ◽  
Market Makers

PurposeThe objective of the paper is to test the existence of a direct effect between the funding level of a firm's pension fund and its respective market price in Portugal, from 2010 to 2015, using a selected sample of Portuguese Stock Index (PSI Geral) firms. Although this relationship has been contemplated in the literature, especially in the United States and the United Kingdom, there is no finding concerning Portugal. The study of pension assets and obligations is of particular importance to investors and market makers alike.Design/methodology/approachThe paper utilizes two distinct methods – a cross-sectional model and a variable-effect event study – to assess the hypothesis that an increase in pension deficit is reflected in the market value of a firm by a decrease of equal magnitude.FindingsThis paper finds that a firm's market value is not reduced by an increase in pension deficit and that pension liabilities are already integrated in corporate debt. These results suggest that shareholders fail to take into account occupational pension plan funding status when valuing a firm in such a way that contrasts with the normal evaluation of debt.Originality/valueTo the best of the authors' knowledge, this is the first attempt to examine this relationship in Portugal.

Sign in / Sign up

Export Citation Format

Share Document