Expectation formation and financial ratio adjustment processes

Article Abstract:

Analysis is offered of financial ratio adjustment processes when there is expensive adjustment and uncertainty about information. A generalized partial adjustment-adaptive expectations model is proposed. The model is designed to characterize financial adjustment processes that are dynamic. The model incorporates the endurance of industry averages changes into the financial ratio adjustment process. The Gauss-Newton non-linear regression technique is employed to estimate the generalized model's structural boundaries. Results indicate that target ratio adjustment is not instantaneous. Results also suggest that differences exist in companies' ratio adjustment patterns in different industries of different sizes.

Methods, Analysis, Rational expectations (Economics), Ratio analysis

---

Measurement of financial leverage in the presence of unfunded pension obligations

Article Abstract:

Unfunded vested pension interests that have not been recorded in the balance sheets of corporations are examined, and whether such obligations can be considered debt by the capital members is considered. A model is used that relates the systematic risk of a company with its business and financial risks. The value of the model is increased once the unfunded vested pension liabilities are incorporated into the rating of the financial leverage.

Economic aspects, Pension funds

---

Revisiting the relations between the default risk of debt and the earnings response of coefficient

Article Abstract:

Issues discussed concern the relationship between earnings response coefficients and default risk. Topics addressed include bond ratings, debt-equity ratios, and expected earnings growth.

United States, Statistical Data Included, Management, Risk (Economics), Financial analysis

Similar abstracts:

• Abstracts: Educational services industry. Financial services (diversified) industry
• Abstracts: Unionization, incomplete contracting, and capital investment. Interpreting the movements in short-term interest rates
• Abstracts: Financial statement information and the pricing of earnings changes. Product pricing based on accounting costs
• Abstracts: The role of the accounting rate of return in financial statement analysis. Investment decisions and the equity accounting standard
• Abstracts: Interpreting hospital performance with financial statement analysis. part 2 User primacy in corporate financial reporting: a social contract approach

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.