Case studies/extra reading

Question 1

What did Dzaja (2013) do?

Answer 1

• Studied CAPM model using European data
• Found higher yields don’t equal higher beta
• Found stock markets don’t lie on efficient frontier

Question 2

What did Martin (1976) do?

Answer 2

• Said better to use minimum expected cash flows for a project
• Said risk of project means firm must treat projects in “quasi portfolio context”

Question 3

Who talked about the portfolio effects of adding investment projects with different returns correlation to the firm’s cash flows?

Answer 3

Lewellen (1971)

Question 4

What did hong (1978) say about insolvency?

Answer 4

• Found insolvency costs can offset the tax benefits of added debt
• Said agency costs depend on the risk attitudes of managers/SH

Question 5

What did Vo 2016 Say about vietnam?

Answer 5

-Found negative correlation between leverage and shareholder value in Vietnam

Question 6

What did Vo 2016 Say about vietnam?

Answer 6

-Found negative correlation between leverage and shareholder value in Vietnam