Journals UITM University of Information Technology and Management
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QUASI-BETA INDEX: MULTIDIMENSIONAL COMPARATIVE ANALYSIS APPLICATION TO DETERMINE RISK INDEX FOR STOCK INVESTMENTS ON THE WARSAW STOCK EXCHANGE
Get PDFCost of capital is the key parameter when evaluating a company’s financial performance and valuing a firm or a project. The cost of equity calculation methods most commonly used in practice are based on market data. When such data is not available, classical methods used to determine required rate of return on equity capital are substituted with techniques based on accounting data. One of these techniques is multidimensional comparative analysis. This text shows an attempt to assess quasi-beta indices using multidimensional comparative analysis. Using five financial ratios calculated for companies from the Warsaw Stock Exchange indices WIG20, mWIG40 and sWIG80, risk coefficients were determined as taxonomic measures of development, and then they were compared to traditional beta indices. The final results are promising – the highest values of quasi-beta indices are assigned to companies that are characterized as above average in risk level
ITERATIONS IN COMPANY VALUATION – EMCINSMED PLC
Get PDFDCF is the most respected method of company valuation. However, it does have a flaw related to the fact that the weights (share of debt and equity in total financing) that are used are based on book values. The problem may be overcome by using a technique based on iterations. In a real-life case, when one has to deal with numerous parameters and time periods, a numerical solution seems to be the only feasible approach. It is a chain of formulae that becomes so integrated that the information between cash flows and cost of capital moves freely. Loops run along columns (from V to WACC, and from E to k) and lines (from one year to another). The cost of capital “tracks” the capital structure and changes accordingly. The valuation is recursive, going backwards in time. In general, the recursive method of company evaluation overcomes a fundamental problem that is often ignored by many other methods: the fact that the cost of capital depends on the financial structure. Here in the paper, the valuation of Emcinsmed S.A. company is done in order to present the i-DCF valuation method. The company is highly leveraged, hence it serves as a good example
THE ROLE OF THE EUROPEAN CENTRAL BANK IN THE MONETARY INTEGRATION OF EUROPEAN UNION MEMBER STATES
No full textEuropean Central Bank (ECB) is a financial institution of the European Union which influences the process of European integration to a large degree. The primary goal of the Bank is to maintain price stability within the Eurozone. The rate of inflation should be close to 2%. Other objectives are subordinate to the main objective. The most important tasks of the ECB include the implementation of the monetary policy for the Eurozone, conducting foreign exchange operations, and taking care of the foreign reserves of the European system. It has the exclusive right to issue euro banknotes and member states of the Eurozone can issue euro coins on authorization of the ECB. The Bank influences the level of life of EU citizens. The economic situation of the Eurozone, in turn, has an impact on support for the European integration on the part of EU citizens. ECB is a global player on financial markets allowing the EU to maintain its global status as an economic powerhouse. The aim of the paper is to present the status of the ECB and its role in the institutional system of the EU
EUROPEAN UNION FUNDS AS A SOURCE OF FINANCING OF INVESTMENT IN COMPANIES
No full textEntrepreneurs are the main beneficiaries of the funds from European Union. The process of financial support from the EU for entrepreneurs conducting business activities in Poland is an important issue, which should be taken up by entrepreneurs, government and other offices and institutions, which participate in the process of absorption of the financial support. Introduction of the possibilities of financing and realization of the investment originating from various EU programs in new the 2007 – 2013 programming perspective, understanding of the stages of preparation of the project and application form, knowledge about financing principles of the investments from granted support are essential. Co-financing of projects realized from EU financial resources has a lot of advantages. First of all, the subsidies present an additional source of financial support for enterprises which allow them to accomplish the investment with considerably lower costs than by using other sources (for example credit). Secondly, the subsidy allows them to make the investment faster, to create new additional job positions and utilize modern technology, which the company couldn’t afford to do by using its own funds. Moreover, the resources from various European Funds have a favorable effect (impact) on enterprise development and on improvement of its competitiveness in the market. The company and all technologie, which could be implemented can become more innovative
THE ATTRACTIVENESS OF POLISH CITIES FOR ATTRACTING OUTSOURCING AND THE ANALYSIS OF BENEFITS FOR THE REGION
Get PDFIn western countries outsourcing has been an integral part of many enterprises for a long time. In Poland it is increasingly seen as a part of a long-term development strategy. Although Poland is only beginning to mark its presence in this area, it is quite often listed as one of the countries with a great potential to attract outsourcing. Among the competitive advantages of our country are geographical and cultural proximity to the markets of Western Europe, European Union membership, steady growth of direct foreign investments and highly qualified labor with knowledge of various European languages. Due to the above-mentioned advantages, many Polish cities easily compete with European business centers. The most successful of them are Krakow, Warsaw, Wroclaw, Lodz and Tricity. Analyzing outsourcing in Poland, we cannot forget its impact on region and on social processes like education, accommodation, traveling. The most important benefits from locating outsourcing companies in our country are the ability to attract further investment, additional revenues for the Treasury from taxes, lower unemployment rate, and finally stimulation of various social initiatives
The Relationship Between Savings and Economic Growth in Countries with Different Level of Economic Development
Get PDFThe aim of this paper is to analyze the cause and effect relationship between economic growth and savings in advanced economies and in emerging and developing countries . In this work we used the method based on studies in macroeconomics and international finance as well as econometric methods (co-integration models and Granger’s causality test). All statistical data used in this paper came from the International Monetary Fund database (World Economic Outlook database). The results confirmed the existence of one-way casual relationship between gross domestic savings and gross domestic product in the case of developed countries as well as in developing and transition countries. At the same time it was revealed the absence of causal relationship between gross domestic product and gross domestic savings both in developed economies and developing and transition countries
SELECTED LEGAL ASPECTS OF MORTGAGE BONDS IN EUROPEAN LAW, WITH EMPHASIS ON GERMAN LEGISLATION
Get PDFThe article discusses the German legislation in relation to mortgage bonds, and also briefly describes the state of European legislation in this regard. There are also themes from other countries in which such mortgage bonds are used. The publication consists of 5 sections, where the first is the introduction and the last contains the conclusions. The main part of the article is part 4, where the author briefly discusses the German Law on Mortgage Bonds. Parts 2 and 3 are the legal background for the main part. The author believes that due to the crisis of the years 2007-2009, the revision of solutions for securitization is needed. There are already some proven designs that through many years of evolution have perfectly fitted the economy. Such a model is undoubtedly the German bond (in any form). In addition, the German act presents interesting solutions for risks that are inherent in banking activities, including in particular the issue and trading of securities
VIW20 – THE CONCEPT OF A VOLATILITY INDEX FOR THE POLISH EQUITY MARKET
No full textThis paper focuses on one of the most important issues in finance, especially while modeling high-frequency data: the volatility of financial markets. Risk management (VaR, especially stress testing and worst case scenario models), asset pricing and particularly option valuation techniques are the areas where the concept of volatility estimators is of crucial concern. Our intention was to find the best estimator of true volatility taking into account the latest investigations in finance research. Based on the methodology designed for the CBOE Volatility Index - VIX (VIX White Paper, 2003) the similar estimator of realized connected with implied volatility for the Polish index WIG20 option data, with all necessary amendments, was calculated (VIW20). The VIX quoted on CBOE is currently the best measure of investment risk perfectly revealing the level of investors’ fears and emotions. The concept of a volatility index is based on Derman’s methodology (Derman et al., 1999), which incorporates the volatility surface taking into account volatility simile and its term structure in the construction of this index. We calculate VIW20 – the volatility index for the WIG20 index, based on the high-frequency data (tick data) for WIG20 index options for the period: X.2003 to V.2007, i.e. from the moment of the introduction of index options on the Warsaw Stock Exchange
IMPACT OF INSTITUTIONS ON FINANCIAL INCLUSION IN AFRICA
Get PDFFinancial inclusion, for which the keystone is access to a bank account, is crucial to overcome the socioeconomic backwardness of African countries and to improve the African societies’ wellbeing. The study concentrates on this continent to better understand the nature of its development in terms of financial inclusion. The research aims to identify the institutions’ impact on financial inclusion in 35 African countries in the years 2010-2019. The analysis is based on a panel model with fixed individual effects. Novelty of the study rests in incorporation of four institutional variables: constraints on the executive, resolving insolvency, property rights, and WGI. The results showed a positive and statistically significant impact of resolving insolvency on financial inclusion (a measure covering people with financial institution accounts) across the entire sample. However, this relationship is especially visible in more developed countries, while constraints on the executive turned out to be crucial for low-income countries. Another novelty ofthe study is creation of an index of financial inclusion covering Mobile Money which was used to verify the obtained results. In this case, no positive impact of any institutional variable was identified which may mean that a favourable institutional environment is not required for the development of Mobile Money