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It is often necessary to estimate a frequency function or certain points on a frequency function from very limited data. A usual procedure for this estimation involves two steps. From the set of “well-known” frequency functions, e.g., the normal, poisson, binomial, etc., one chooses that function which seems likely to best “fit” and then uses the available data to estimate the parameters of the chosen distribution. If no one “well-known” function can be chosen a priori, then perhaps several likely candidates are tried and the one which fits best according to some criterion is chosen. For many purposes, this procedure is quite unobjectionable.
In this paper, a simple model of individual financial decision making is used (1) to construct the market demand curve for common stock, and (2) to question the appropriateness of market value maximization as the objective of corporate financial management.
A useful distinction is sometimes maintained between business risk associated with uncertainty of receipts generated by a firm's assets and financial risk defined as the probability of incurring penalty costs stemming from liability claims on assets and asset yields. In fact, disagreement in recent literature on the exact role of capital structure in market valuation of business firms is easily interpreted once the risk assumptions of the literature such as perfect certainty, business risk, and financial risk have been identified.
The Journal of Financial and Quantitative Analysis (JFQA) publishes theoretical and empirical research in financial economics. Topics include corporate finance, investments, capital and security markets, and quantitative methods of particular relevance to financial researchers. With a circulation of 3000 libraries, firms, and individuals in 70 nations, the JFQA serves an international community of sophisticated finance scholars—academics and practitioners alike. The JFQA prints less than 9% of the more than 1,000 manuscripts submitted annually. An intensive blind review process and exacting editorial standards contribute to the JFQA’s reputation as a top finance journal.
This chapter tracks the final 18 months of a business that was slowly fading into corporate obscurity, holed fatally by a massive fraud and victim of a one-sided deal with its bankers that resulted in the disposal of most of its profitable divisions. GEC’s Arnold Weinstock played a key role in the final stages, but ultimately withdrew its offer to buy the remaining activities, forcing Anderson to concede defeat. Although Ferranti disappeared as trading operation in December 1993, the name lived on in various management buy-outs and a pension scheme that ironically has continued to flourish.
This chapter summarises the argument running through the book. It identifies key features of the period since 1970, in particular the rise of neo-liberal economics and the decline in status of trade unions. As a result, the anticipated increase in leisure time has not occurred; if anything the opposite has happened. A further feature of the period is that excessive work for some has been accompanied by high levels of unemployment and underemployment. The outcome is a pervasive sense that time is short, and that there is little beyond personal organisation that can be done about it. The book concludes with evidence that time can be reorganised.
While the court cases were taking place in the States, Ferranti management was assessing how the fraud could be accommodated in the accounts, and especially the extent of bank borrowing required to prevent bankruptcy. It will become clear that while a bank syndicate provided extensive loans, the conditions placed on these funds resulted in an extensive disposal programme that left Ferranti bereft of profitable activities, and especially the hugely successful Scottish division. Another condition was the replacement of Derek Alun-Jones as chief executive with Eugene Anderson, an American with extensive experience of corporate turnarounds. These developments marked a dramatic change in both the nature and size of the business, as well as the corporate culture that had flourished for over 100 years.