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Corporate Finance
Analysts' independence refers to the ability of the analyst to publish opinions about the stocks they cover, free from corporate interference or oversight. In this pre-SOX example, analysts were under pressure from the investment banking arm of their parent company to run downgrades past management. The implication is that the analyst loses independence, that his or her views are going to be sterilized by senior management to avoid offending a current or potential future customer for some of the other services that the bank offers.
Maintaining a buy recommendation after a stock's price falls is not evidence that the analysts' independence is compromised. If the analyst thought the stock was undervalued before the drop, surely the analyst thinks the stock is still undervalued at the lower price point. The independence of an analyst cannot be judged on the basis of his or her recommendations. Independence...
That changes to recommendations must be passed through senior management prior to being published inherently eliminates independence by the very definition of independence. The buy side is the buyer of research, the sell side is the company that produces the research. Buy side firms might want second opinions and therefore have a need for sell side research reports. The problem is that many buy side clients do not conduct their own research. Mr. Barkocy's criticism is fair. If sell side firms are warning companies of potential downgrades, that infringes upon analyst independence. The buy side then cannot trust in the research that is published. The sell side might ignore such criticism if it makes more money doing it this way.
Analysts…
Case #2
It does not appear that Target's credit card portfolio is out of line with its historic norms. Target has always had a credit card portfolio that is among the riskiest in the business, and this is built into the company's cost structure. Target knows that a relatively high percentage of total loans will be written off, but it makes provision for that, and as a result it has never reported losses greater than expected. Thus, the current policy does not seem to be anything particularly different.
The other factor is the timing of the concern, which was at the outset of the recession in 2008. At that time it was believe that Target should reduce its loans because more customers were going to struggle to repay them. The strategy that Target took, however, is somewhat the opposite. By extending credit, it would be able to engender greater brand loyalty among existing customers and also to attract new customers who would be otherwise unable to shop elsewhere. It is worth noting that Kmart enacted a similar strategy with its credit products as the result of the recession. Target's approach has not created too much trouble for the company, and its ability to identify good people to which to lend money does not appear to have waned. If that confuses some analysts, so be it. Target sometimes lends to riskier customers, but it has priced that into its credit policy.
finance and financial entrepreneurship. The basis of the article is on a discussion that was held on this subject among four leading lights of financial entrepreneurship in the United States - Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. These people are famous in their own right and have had a sizeable role in financial entrepreneurship in the U.S. over the last 20 years. We have first discussed
Corporate Governance: A review of Literature What is Corporate Governance? Principles of Corporate Governance Theoretical foundations of corporate governance Agency theory Stewardship theory Stakeholder theory Post-Enron theories Corporate Governance: The changing trends Recent developments on regulatory front and research Corporate Governance: Relationship with market indicators Venture Capital Model: Impact on Corporate Governance Appendix I- Examples of Corporate Governing bodies This paper is a review of pertinent literature on corporate governance. Corporate governance addresses the control issues created due to the separation of ownership
Bush, who declared that corporations which jeopardized the investments and jobs of millions of individuals should pay their dues. The United States Senate and the House of Representatives also became involved and proposed numerous modifications. The pillar of the changes occurred in financial reporting after the accounting scandals is based on increased transparency and more support in conducting audit operations. The XBRL system for instance will allow the Securities and
Notwithstanding the challenges involved, the stakes are high and there is little room for false starts or experimentation; therefore, identifying a general set of best practices that Gambian organizations can follow in developing their own set of sustainable productivity practices represents a valuable and timely undertaking, which relates to the purpose of the study which is discussed further below. Purpose of Study The overall purpose of this study was to study
Ethics, Corporate Governance and Company Social Responsibility OCED state-owned enterprises and Privatized companies In the past few decades, emerging economies have launched ambitious plans to privatize their state owned enterprises (SOEs). The volume of privatization in emerging economies has increased from $8 billion in 1990 to about $65 billion in 1997 (Dharwadkar, George, & Brandes, 2000). In privatization, ownership is transferred from the state to new private and public owners, which may
Risks to the Global Capital Market "Beware the next financial blind spot." Summary Gillian Tett's article exemplifies various issues and risks involving financing in and out of the bank. The world marketing systems and non-bank entities are taking shape because it happened during the managerial times of Mr. Paul Tucker. Tucker expresses the point of need for many financiers to understand and consider the effects brought by shadowy banks, most of which