Topic
Market value
About: Market value is a research topic. Over the lifetime, 8926 publications have been published within this topic receiving 309478 citations. The topic is also known as: open market valuation & fair value.
Papers published on a yearly basis
Papers
More filters
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
12,521 citations
TL;DR: This article investigated the relationship between management ownership and market valuation of the firm, as measured by Tobin's Q. In a 1980 cross-section of 371 Fortune 500 firms, they found evidence of a significant nonmonotonic relationship.
7,523 citations
TL;DR: In this paper, the authors present evidence consistent with theories that small boards of directors are more effective, using Tobin's Q as an approximation of market valuation, and find an inverse association between board size and firm value in a sample of 452 large U.S. industrial corporations.
6,611 citations
TL;DR: This paper argued that the average quality is likely to be low, with the consequence that even projects which are known (by the entrepreneur) to merit financing cannot be undertaken because of the high cost of capital resulting from low average project quality.
Abstract: NUMEROUS MARKETS ARE characterized by informational differences between buyers and sellers. In financial markets, informational asymmetries are particularly pronounced. Borrowers typically know their collateral, industriousness, and moral rectitude better than do lenders; entrepreneurs possess "inside" information about their own projects for which they seek financing. Lenders would benefit from knowing the true characteristics of borrowers. But moral hazard hampers the direct transfer of information between market participants. Borrowers cannot be expected to be entirely straightforward about their characteristics, nor entrepreneurs about their projects, since there may be substantial rewards for exaggerating positive qualities. And verification of true characteristics by outside parties may be costly or impossible. Without information transfer, markets may perform poorly. Consider the financing of projects whose quality is highly variable. While entrepreneurs know the quality of their own projects, lenders cannot distinguish among them. Market value, therefore, must reflect average project quality. If the market were to place an average value greater than average cost on projects, the potential supply of low quality projects may be very large, since entrepreneurs could foist these upon an uninformed market (retaining little or no equity) and make a sure profit. But this argues that the average quality is likely to be low, with the consequence that even projects which are known (by the entrepreneur) to merit financing cannot be undertaken because of the high cost of capital resulting from low average project quality. Thus, where substantial information asymmetries exist and where the supply of poor projects is large relative to the supply of good projects, venture capital markets may fail to exist. For projects of good quality to be financed, information transfer must occur. We have argued that moral hazard prevents direct information transfer. Nonetheless, information on project quality may be transferred if the actions of entrepreneurs ("which speak louder than words") can be observed. One such action, observable because of disclosure rules, is the willingness of the person(s) with inside information to invest in the project or firm. This willingness to invest may serve as a signal to the lending market of the true quality of the project; lenders will place a value
5,639 citations
Book•
01 Jan 1984
TL;DR: In this article, the authors studied 43 successful American companies to discover the secrets of the art of American management, including a bias for action-preferring to do something, anything, rather than performing endless analyses and convening committees, staying close to the customer learning and catering to the client's preferences, autonomy and entrepreneurship, productivity through people, making all employees aware that best efforts are vital and that they will have part of the rewards of the firm's success, hands-on, value driven, and stick to the knitting.
Abstract: The authors studied 43 successful American companies to discover the secrets of the art of American management. The firms were in various categories, including high-technology companies, consumer goods companies, general industrial goods companies of interest, service companies, project management companies, and resource-based companies. To choose the companies, six measures of long-term superiority (three are measures of growth and long-term wealth creation over a 20-year period, and three are measures of return on capital and sales) were selected and imposed: compound asset growth, compound equity growth, average ratio of market value to book value, average return on equity, and average return on sales. The superior companies had eight attributes characterizing their distinction. Each attribute is discussed in detail, with examples and anecdotes from the firms involved. The attributes are: (1) a bias for action-preferring to do something, anything, rather than performing endless analyses and convening committees; (2) staying close to the customer-learning and catering to the client's preferences; (3) autonomy and entrepreneurship--dividing the corporation into companies and encouraging independent and competitive thought within them; (4) productivity through people--making all employees aware that best efforts are vital and that they will have part of the rewards of the firm's success; (5) hands-on, value driven--insisting that higher-ups keep in contact with the company's essential business; (6) stick to the knitting--staying with the business the firm knows best; (7) simple form, lean staff-administrative layers are few, with few staff members at the top; and (8) simultaneous loose-tight properties--a climate combining dedication to the firm's central values along with tolerance for all employees who accept those values. The rational model of management is discussed, along with its history and implications in corporate functioning. A chapter on human motivation discusses some of the contradictions of human nature that are relevant to management and describes how they can be dealt with to everyone's benefit.
4,117 citations