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predicting cross-sectional returnsif the market is assumed to be efficient all securities should lie along the security market line that relates the
calendar studiesthese attempted to predict rates of return during a calendar year and examine if there is any particular observable pattern in the
quarterly earnings studiesthe quarterly earnings studies are a part of time-series analysis these studies aim at predicting future returns for a
role of market efficiencymarket efficiency signifies how lsquoquickly and accurately does relevant information have its effect on the asset prices
discount rate determinantsthe discount rate is the firm weighted average cost of capital it represents the opportunity cost of investing creditors
stream of expected returnsinvestment returns can take many forms an investor must consider all these forms to evaluate an investment option
negotiating and closing transactiona diverse set of skills and very thorough preparation is required for negotiating and closing a divestiture
the selling processthe four key elements that constitute the selling process are i identification of prospective buyers ii selection of the type of
contents of the offering memorandumexecutive summary it constitutes one of the most important parts of the document and is the key selling chapter of
preparing the divestitureno two divestitures are exactly alike and one of the foremost tasks of the project team is to determine precisely what is to
assembling the divestiture teamdivestment of a business requires a team of functional experts under the direction of an experienced project manager
financial issues of divestituresmany corporations review the business portfolio to determine the operations that fit their core strategies the firms
secured lbo financing or asset-based lendingunder asset-based lending the borrower pledges certain assets as collateral asset-based lenders look at
leveraged buyouts lbosa leveraged buyout is a financing technique where debt is used to purchase the stock of a corporation and it frequently
product advantagesa firm that has developed a reputation for superior products in the domestic market may find acceptance from the foreign consumers
rationale for mergersmany of the motives behind mergers of firms are discussed hereundergrowthgrowth is the most general and important motive for
cross-sector analysisthe growth of a country depends upon how fast a country can adapt to deregulation and internationalization deregulation and
macro-economic analysismeasuring the level of economic activitygross national product gnp and the gross domestic product gdp are the two most widely
global sector indixesmorgan stanley capital international msci measures the international and national performance it launched all country sectors on
correlation among stock index returnscorrelation among stock index returns can be defined as the extent to which the values of different types of
effect on exchange ratesas we know one of the most vital determinants of changes in relative exchange rates is the relative inflation rate assuming a
inflation in international marketsin 1983 gultekin tried to find out the relation between stock return and the inflation rates expectedunexpected he
historical inflation and stock value experiencethe experimental evidence denies the status of stocks as a good hedge against inflation a study
effect on stock valuationuntil the 1960s common stocks were viewed as a good instrument against loss caused by inflation also before 1960 stocks were
inflation and exchange ratesto understand the impact of inflation several terms should be understood for example inflation from the investors