Stanko Racic

Growth Opportunities and Corporate Debt Policy: The Case of the U.S. Defense Industry

The U.S. defense industry provides a natural experiment for examining how changes in growth opportunities affect the level and structure of corporate debt. Compared with other firms, the growth opportunities of defense firms increased substantially during the Reagan defense buildup of the early 1980s, but then declined significantly with the end of the cold war and associated defense budget cuts in the late 1980s and early 1990s. We examine how the level and structure of corporate debt changed for a sample of 61 defense firms and a benchmark sample of 61 manufacturing firms during 1980-1995, a period spanning the changes in growth opportunities. The debt levels of weapons manufacturers, which were most affected by the changes in growth opportunities, increased significantly as their growth opportunities declined. In addition, these firms lengthened the maturity structure of their debt, decreased the ratio of private to public debt, and decreased the use of senior debt as their growth opportunities declined. The results complement other studies that have found cross-sectional relations between proxies for growth opportunities and leverage variables and validate the prominent role played by growth opportunities in the theory of corporate finance.

The Impact of Exchange Rates On Hotel Occupancy

ABSTRACT In many hospitality and tourism programs, students are usually required to take only the most basic finance course. This can leave them drastically under-prepared for real-world situations. Hospitality and tourism is the worlds single largest industry and probably one of the industries most affected by foreign exchange movements. This exposure to foreign exchange movements is magnified by the discretionary nature of hospitality and tourism spending, making the profitability of hospitality providers very sensitive to changes in the exchange rate. This paper explores the effect, if any, of a change in the dollar value of five currencies–UK pound, euro, Canadian dollar, Japanese yen, and Mexican peso–on the hotel occupancy in seven major U.S. tourist destinations–Orlando, Los Angeles, Washington, D.C., New York, San Francisco, Miami, and Las Vegas.

Strategic recurring traits that contribute to firm loyalty: case studies of best business practices

Fostering best business practices by organisations to strategically leverage its human capital and develop the professional intellect are important goals to meet to ensure sustainable levels of profitability and employee productivity. Selected employees from five companies located in the metropolitan area of Pittsburgh, PA, were given a set of questions to answer concerning the successful traits of inspiring leadership, outstanding or knockout facilities and the ability of companies to frame their work as part of a deep, rewarding purpose. Management has found that there is wisdom in this line of thought, even in difficult economic times, since a commitment to develop a corporate culture helps management optimise its human capitals productivity with the least amount of supervision. Optimisation the potential of the workforce through trust and goodwill, employees and management usually find a convergence of common goals that ultimately increases operational efficiency and profitability for the firm. Usually both employees and management mutually benefit by the optimisation the potential of the workforce through trust and goodwill that ultimately results in a convergence of common goals that increases the firms operational efficiency and profitability.