Philip English

Capital budgeting valuation : financial analysis for today's investment projects

The purpose of this book is to provide a comprehensive examination of critical capital budgeting topics. Coverage extends from discussing basic concepts, principles, and techniques to their application to increasingly complex, real-world situations. Throughout, the book emphasizes how financially sound capital budgeting facilitates the process of value creation and discusses why various theories make sense and how firms can use them to solve problems and create wealth.

Emerging Market Benefits, Investability and the Rule of Law

We revisit the Barry, Peavy and Rodriguez (1998) paper and investigate the underlying source of emerging market performance benefits. We classify stocks according to their investability and legal origin. Emerging markets continue to represent the performance benefits they had during the Barry et al. (1998) period by providing not only return enhancement but primarily risk-reduction. More specifically, we find that an investor can achieve greater benefits by focusing on a limited set of emerging markets with a French civil law foundation and that are moderately investable stocks.

How Do Practitioners Value Common Stock

Early work in the 1970s documented a significant difference between the valuation of stock as taught by academics and as practiced by investment professionals. We revisit the issue of practitioner valuation of common stock using a survey-based investigation. We find that most practitioners use multiple techniques, that those techniques vary across the time horizon employed to estimate future variables and that the significant gap that existed between academics and practitioners continues to this day. We extend earlier work to examine differences between analysts working for different types of institutions and with different asset management styles.

Mutual Fund Exit and Mutual Fund Fees

We examine the effect of mutual fund fee structure on mutual fund exit mode and timing. The evidence presented herein is consistent with fee maximization by mutual fund sponsors or managers, increased conflicts of interest for funds charging 12b-1 fees and higher management fees, and a pecking order for mutual fund exit method. Specifically, mutual fund exits that result in decreased fee income are delayed relative to exits that do not and exit strategies that retain fee income are more likely than strategies that do not.