Researchers criticize predominant expected return models for being imprecise and based on fundamentally flawed assumptions. This dissertation evaluates Implied Cost of Capital, CAPM and the Three-Factor model abilities to estimate returns. We study each models expected return association to realized return and test for abnormal returns. Our sample covers the period 2000 to 2012 and includes 2916 US firms. We find that Implied Cost of Capital has a stronger association with realized returns than CAPM and the Three-Factor model. Implied Cost of Capital also has lower abnormal returns not accounted for by expected returns. Our results suggest that we can replace CAPM and the Three-Factor model with Implied Cost of Capital.

The objective of this research is to test human capital theory via the earnings announcements through the returns within the for-profit education and training services industry. This theory posits that enrollment levels would rise during recessionary periods and this should be reflected in better earnings announcements of the education firms. Data was retrieved from the Compustat, CRSP, Thompson IBES, Google Finance, and Yahoo! Finance databases spanning the recessionary years of 2008 through 2010. The first hypothesis utilized a price index weighted by the education firms' market capitalization and the Russell 3000 Index as a proxy for the market to assess the daily returns of the education industry relative to the market. The second and third hypotheses involved assessing the quality of the earnings announcements within the education industry on a Friday vs. non-Friday report basis. The fourth hypothesis explored the actual EPS vs. forecasted EPS in consecutive quarters to test for differences in the earnings of that are better-than and those that are the same-or-worse than expected. The final hypothesis utilized the cumulative abnormal returns and cumulative excessive returns methodologies to compare the performance of the periods before and after the announcements. No support for the first four hypotheses was found. Consistent with expectations established by other research using CAR and CER methodologies, the fifth hypothesis was supported. Support for human capital theory was not found because four hypotheses were unsupported. This study was limited to U.S. education firms that were publicly traded on major U.S. exchanges. No private for-profit or non-profit firms were included in this study. Knowledge was gained by exploring the earnings announcements of the education industry for evidence of human capital theory. The absence of support for the theory within the industry during a recession could be an indicator of other issues affecting the industry that need to be researched further before any conclusions can be reached. This study extends the research in earnings announcements by examining the relationship the education industry has with the market. It also contributes to the work in human capital theory by testing the education industry's performance during recessionary years.

This study examines the market reactions to share repurchase announcements made by companies listed on the Johannesburg Stock Exchange from 2003 to 2012. We use an event study methodology and the Capital Asset Pricing Model to determine if there is an announcement effect when a share repurchase announcement is made. Our analysis show that consistent with signalling theory and the announcement effect, share repurchase announcements are associated with positive abnormal returns. The average abnormal return and cumulative average abnormal return noted was 0.46% and 3.81% respectively for the event period (t -20, t +20). There was an observable trend of declining share prices before the share repurchase announcement however the decline in the shares prices was not significant. We found some evidence of market timing ability in 2005 and 2010 however as a collective, we found no significant difference in timing a share repurchase announcement. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Purpose: The purpose of this study is to explore whether customers’ return reasons differ between product groups and if their e-commerce experience is related to the return reasons. Moreover, we test if customers’ e-commerce experience is related to whether they refrain from ordering apparel when there is a perceived absence of information, and what product-oriented tools they prefer when purchasing apparel online. Design/methodology/approach: This is an exploratory mixed methods research within a fashion e-commerce context. We initiated the study by a systematic literature review to identify an underdeveloped area in the literature. As a result, it details an investigation of return reasons and product-oriented tools based on a focus group and customer survey. Findings: Results show that return reasons to some extent were similar between the product groups, where size and fit were the most common reasons for returns. However, the given share of the return reasons differed between the product groups. It became evident that some product-oriented tools are more preferred than others, namely product reviews and model-related tools (i.e. specified measurements and pictures on different sized models). Findings further show that a majority of respondents would completely or sometimes refrain from purchasing when there is an absence of information online. These findings were also investigated in relation to customers’ e-commerce experience, where we found a relationship between the variables. Practical implications: Several meaningful insights for fashion online retailers are developed from the results of this study, which can help them minimise unnecessary returns. While return reasons among apparel have, in the past, been analysed on an aggregated level, this study contradicts this practice. This study further suggests retailers to determine whether and how to manage, maintain and prioritise product-oriented tools on their website while still being in line with customers’ preferences and expectations. Originality/value of paper: This study contributes toward the literature of returns management in the fashion e-commerce context by, firstly, examining whether customers’ return reasons differ between product groups and secondly by investigating their preferences of product-oriented tools when purchasing apparel online. Lastly, it contributes through taking customers’ e-commerce experience of purchasing apparel online into consideration.

This thesis uses an event study methodology to investigate the short- and long-term effect on shareholder value from Lex ASEA-approved spin-offs' on the Swedish market between 1991-2022. The impact of spin-offs has been examined by estimating the effects on the parent firm, the spun-off entity, and a value-weighted pro-forma entity. This study has also attempted to capture sources of any abnormal returns by testing several potential determinants. The study found positive but insignificant short-term abnormal returns for all measured entities, which contradicts the positive results of previous US and European studies. Testing for relative spin-offsize and industry focus as determinants for abnormal announcement returns indicated that smaller intra-industry spin-offs yield greater abnormal returns. The spun-off and pro-forma entities showed significant long-term abnormal returns compared to the OMXSPI index benchmark. When compared against a portfolio of matched firms, only the spun-off firms delivered significant abnormal returns, but only for one of the tested intervals. Testing for relative spin-offsize and industry focus as determinants for long-term performance found that cross-industry spin-offs yield positive long-term abnormal returns for the spin-off firm. Lastly, testing the proxies for operational performance for the parent firms show general improvements in ROA and EBITDA/TA post spin-off and inconclusive results for gross profit margin. Consequently, the short-term findings presented in this study do not exhibit any increase in shareholder value related to the announcement of spin-offs. In contrast, the long-term results show increased shareholder value for the spun-off entity and the hypothetical pro-forma combined firm.

This research examines the impact of acquisition strategies and the level of economic development of the target country on announcement returns of acquiring firms in the United Kingdom (UK) during the sixth (2003-2007) and upcoming takeover wave (2013-present). The different acquisition strategies concern geographic expansion (GEO), increasing market share (IMS), vertical integration (VERT), access to intangible resources (INT), concentric diversification (CDIV) and pure diversification (PDIV). Based on a sample of 877 acquisitions, evidence shows that GEO significantly creates value in the sixth wave and results in significantly lower announcement returns in the upcoming wave, possibly explained by a higher integration of capital and production markets. However, after adding the remaining acquisition strategies to the regression model, the latter effect disappears. It shows that VERT and CDIV result in significantly higher announcement returns in the upcoming wave compared to the sixth one. Evidence does not show a relation between the level of economic development of the target country and announcement returns.

The mail order business was once a traditional method of selling and distributing clothes, and other commodities, to customers. Now, the e-commerce trend, with more sophisticated techniques of marketing, selling, and distributing goods, has not only challenged the traditional mail order system, it seems also that the traditional retail chain and even fashion chains are being challenged. This change not only affects how sellers compete (be they long-distance or not), it has probably affected us as consumers - our requirements and how we purchase. This work contributes to this development through extensive empirical investigations into how and why customers return what they have previously ordered. The primary conclusions are that consumer requirements tend to vary, and therefore the standard solution of delivering goods to a vast variety of consumers without engaging in discussion about the individual customer service requirements (et cetera) is most probably the central cause behind the increasing return trends seen in the business. The purpose of this thesis is to identify and to characterise important factors causing returns. Further, to assist the development of Returns Management research, the intention is to develop a theoretical model of a Supply/Demand Chain returns system that incorporates an application of avoidance and gatekeeping in a distance sale context with the aim to improve overall systems performance. The research design used in the thesis was a case study performed at one of the largest mail order organisation in Sweden, with a long tradition in the business. The main data used in the thesis has been collected from interviews, a questionnaire, and secondary data exported from the case organisation. Sales and returns data covering approximately one year of sales and returns in the Swedish market was quantitatively analysed, and the results were regularly discussed and presented to key informants at the case organisation to substantiate authenticity and trustworthiness. The overall conclusion is that the distance-sales trade is affected by the trends that are seen in other areas, namely increased competition - not only from within the distance trade but also from the traditional retail trade. This is probably due to the ease of shopping via e-commerce, and the vast supply of products that even exceeds that of the retail chains. This attracts new customer groups with new demands and requirements. This, in many ways, is an archetypal difference between today’s e-commerce business and yesterday’s mail order business, and could explain why customers from the different channels behave and return differently. The use of the Internet affects how we purchase, and therefore the result of the purchase. It is quite likely that we are far more spontaneous when purchasing over the Internet in comparison with telephone and mail orders. Key words: Returns management, customer service, demand chain management, e-commerce, avoidance, gatekeeping

This paper investigates the impact of dividend reduction announcements on the returns to stocks listed on the Stockholm Stock Exchange. We perform an event study on dividend cutting firms between 2002-2016 to determine if contrarian trading on the basis of negative dividend announcement yields abnormal returns. We evaluate the immediate market reaction during a three-day event window surrounding dividend announcements. Thereafter we test a contrarian trading strategy by examining abnormal returns during a holding period up to twenty days following the initial event. We evaluate the results in reference to previous literature on post earnings (dividend) announcement drift and contrarian investment strategies. The findings suggest that the initial market reaction to dividend cuts is negative, but that the abnormal returns to buying stock following dividend reduction announcements are negligible. Furthermore, we argue that there might be means of increasing these returns by supplementary analysis of firm specifics.

We propose the use of methods based on the Shapley value to assess the fact that private returns to lower levels of educational attainment should incorporate prospective returns from higher attainment levels, since achieving primary education is a necessary condition to enter secondary and tertiary educational levels. We apply the proposed adjustment to a global dataset of private returns to different educational attainment levels and find that the corrected returns to education imply a large shift of returns from tertiary to primary schooling in countries at all income levels. (authors' abstract) / Series: Department of Economics Working Paper Series

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