This work contributes to the methodology of valuation of financial derivative contracts in an incomplete market. It focuses on a special type of incompleteness caused by the presence of a non-traded stochastic risk factor, affecting the value of the contract. The non-traded risk factor may only appear in the payoff of the contract or, in addition, may enter the dynamics of the traded asset. We consider both cases. We suggest a discrete time discrete space binomial model for the traded stock and the non-traded risk factor. We work in the utility maximization framework with dynamically changing agent's preferences. We present a discrete time multi-period analog of the forward and backward utility processes recently developed in continuous time. We use methods of stochastic control and provide the indifference valuation algorithm with both the forward and backward dynamic utilities. We compare the two approaches and provide conditions under which they assign the same value to the contract. We show that unlike the backward dynamic utility, the forward dynamic utility yields prices that do not depend on the end of the investment horizon. We pay attention to the choice of the equivalent martingale measure used for valuation (i.e., the minimal martingale measure and the minimal entropy measure for the forward and the backward utility processes correspondingly). We explicitly characterize both measures and give conditions under which they coincide. We extend our algorithm to the case of American and partial exercise contracts. We illustrate our work with numerical examples, showing that in an incomplete market, a call option on a non-traded risk factor may optimally be exercised early, and that it may be optimal to exercise only a fraction of the total number of contracts held, if partial exercise is allowed. In continuous time we extend the existing results to the case of American contracts with both the backward and the forward utilities. We emphasize the similarities between our discrete time valuation algorithm and the continuous time valuation. The two approaches use the same pricing measures, yield prices through nonlinear functionals of similar form, exhibit a similar relationship between the backward and forward prices, and a similar structure for the aggregate minimal entropy. We believe that our work makes a contribution by exposing the two above mentioned ways of dependence on the non-traded risk factor, and by providing a new dynamic indifference pricing algorithm that allows consistent valuation across different investment horizons.

This study is aimed at investigating the effect of mergers and acquisitions on the share prices and dividends involving South African companies in the food and beverage industry. A sample of 79 mergers from 1999 to 2005 was used. The data was analysed using the event study methodology and descriptive statistics. In addition, the paired t-test was also conducted to test the significance of the results. The results were presented using graphs, tables and charts. The results showed that target companies obtained negative abnormal returns during the announcement of mergers while acquiring companies on the other hand received positive abnormal returns. The results imply that it can no longer be generalized that target companies always win and acquiring companies lose during the merger activity. On the other hand, the dividends for target companies increased significantly after the merger, while the dividends for acquiring companies remained insignificantly negative after the merger. / Graduate School of Business Leadership / MBL

A research report submitted In partial fulfilment of the degree Master of Commerce (Accounting) University of the Witwatersrand / This research report evaluates the nature of, and gathers evidence of, the potential misuse of the non-GAAP 'adjusted earnings' by JSE-listed firms in South Africa. The prior literature is explored and applied to the South African context which is a unique environment due to the mandatory use of the non-GAAP Headline Earnings . The prior literature provides the grounding for the research methods which enhance the validity of the study. Adjusted earnings are analysed through 3 research questions and sub-questions. The first research question focuses on the nature of the use of adjusted earnings in South Africa, by examining the extent of use of adjusted earnings by a population of JSE firms, as well as the most common types of adjustments used. It is evaluated using descriptive statistical methods from data from databases and company annual financial reports. Research question 2 gathers evidence for misuse through the identification of 'valid' and 'invalid' adjustments made in the determination of adjusted earnings, as well as the identification of the repeated use of particular adjustments, which are indicators of misuse from the prior research of Bhattacharyaa, Black, Christensenb and Larsonc (2003) and Doyle, Lundholm and Soliman (2003). This question uses an ANOVA and repeated measure approach respectively using the same data from research question 1. The third research question examines whether there is an association between adjusted earnings and whether firms meet or beat analyst earnings forecasts more often (the dependent variable) as set out in Doyle, Jennings and Soliman (2013). This is assessed using logistic regression analysis using analyst earnings forecast data and company results data The results indicate that types of firms and adjustments made in South Africa are similar to U.S. literature. It raises questions around use of adjusted earnings as a performance metric and the use of Headline Earnings in South Africa. Evidence of misuse of adjusted earnings was found. In addition, a strong relationship similar to the Doyle et al. (2013) findings was found between the use of upwardly adjusted earnings and the propensity of firms to meet or beat analyst forecasts. Whether a firm s accounting earnings met or beat the forecast was also found to have significant influence on the dependent variable. It was also found that South African firms met or beat analyst forecasts significantly less often than U.S. firms, suggesting that there may be structural differences in the analyst forecasts environment in South Africa when compared to the U.S. The results suggest that adjusted earnings may be misused in South Africa, and one of the motivations to do so is to meet or beat analyst earnings forecasts. / MT2017

Zhang Yinghong. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2001. / Includes bibliographical references (leaves 34-36). / Abstracts in English and Chinese.

by Hu Wai Kwok, Li Siyi. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1997. / Includes bibliographical references (leaves 85-87). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF ILLUSTRATIONS --- p.v / LIST OF TABLES --- p.vi / ACKNOWLEDGEMENT --- p.vii / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Overview Of Fundamental Analysis --- p.1 / Valuation Approaches --- p.2 / Information Sources --- p.2 / Methodology --- p.2 / Chapter II. --- ANALYTICAL FRAMEWORK FOR COMMON STOCKS --- p.4 / Chapter III. --- ECONOMIC ANALYSIS --- p.5 / International And Domestic Economic Environment --- p.5 / Economic Forecasting --- p.6 / Chapter IV. --- INDUSTRY ANALYSIS --- p.9 / Industry Classification And Industry Life Cycle --- p.9 / The Economy And Industry Analysis --- p.10 / Porter's Five Competitive Forces --- p.11 / Industry Analysis Techniques --- p.12 / Information Sources For Industry Analysis --- p.13 / Chapter V. --- COMPANY ANALYSIS: MEASURING AND FORECASTING EARNINGS --- p.14 / Understanding The Financial Statements --- p.14 / Ratio Analysis --- p.15 / Influence of Accounting Practices --- p.17 / Capital Structure And Dividend Policy --- p.18 / Forecasting Earnings --- p.19 / Evaluation of The Management Strategy --- p.21 / Chapter VI. --- APPLIED VALUATION --- p.23 / Intrinsic Value Versus Market Price --- p.23 / Determination Of Intrinsic Value --- p.23 / Dividend Discount Models (DDM) --- p.23 / Free Cashflows To Equity Discount Models (FCFE) --- p.28 / Chapter VII. --- CASE STUDY --- p.31 / Company Background --- p.31 / Birth of Cheung Kong Infrastructure --- p.31 / The Restructuring --- p.31 / Business of CKl --- p.33 / Economic Analysis --- p.33 / China's Macroeconomic Environment --- p.34 / Regional Economic Conditions --- p.35 / Economic Forecasting --- p.37 / Industry Analysis --- p.37 / Industry Classification --- p.37 / The Economy And Industry Analysis --- p.38 / Industry Overview And Historical Performance --- p.38 / Porter's Five Forces --- p.43 / Industry Life Cycle --- p.45 / Hong Kong Construction Materials Industry --- p.46 / Company Analysis --- p.47 / CKI's Businesses --- p.47 / Company Strategy Analysis --- p.48 / Risk Factors --- p.50 / Financial And Operation Analysis --- p.51 / Forecasting And Valuation --- p.52 / Intrinsic Value vs. Market Price --- p.57 / Chapter VIII. --- SUMMARY --- p.59 / APPENDIX --- p.61 / BIBLIOGRAPHY --- p.85

Thesis: M.S., Massachusetts Institute of Technology, Sloan School of Management, 1975 / Bibliography: leaves 86-87. / by Peter F. Hollings and George Raff. / M.S. / M.S. Massachusetts Institute of Technology, Sloan School of Management

Thesis (MComm)--Stellenbosch University, 2012. / ENGLISH ABSTRACT: Do firms that have low dependence on physical assets as well as high profitability outperform companies with the opposite characteristics in the market? Despite the lack of empirical research, conventional wisdom would suggest that they should. Conceptually, investors should prefer profitable companies to less profitable companies, and lower capital-intensive to high capital-intensity firms. Using a large sample of global stocks over the period from 1988 to 2010, the effect of using capital intensity and return on capital employed (ROCE) as filters for portfolio inclusion was investigated. A quantitative research approach was followed in this study. This involved dividing the sample into five subsets, or quintiles, according to the specific metric (for example capital intensity). The total return of an equally weighted portfolio was then measured for each quintile for the subsequent 12 months. The portfolio was rebalanced annually and the subsequent 12-month return recorded. Because enhanced performance on new capital investments may take longer than 12 months to be reflected in share prices, quintile performance was also measured over five-year holding periods. The empirical findings of this study reveal that there was no discernible pattern of outperformance by low capital-intensive quintiles using annual rebalancing. However, the lowest capital-intensive firms had the highest average returns using five-year holding periods. The highest ROCE firms performed best with annual rebalancing and with five-year holding periods. Combining both capital intensity and ROCE, a portfolio focused on low capital intensity and high profitability produced a compound annual growth rate that is 9.18 percentage points higher than a portfolio focused on the highest capital intensity and the lowest ROCE. Over five-year holding periods there is a distinct outperformance by low capital-intensive firms with high operational profitability. These results indicate that allocation of investment capital to capital-intensive companies with low operational profitability seems likely to impair long-term returns, and there may be value in a focus on low capital-intensity firms that are able to generate high returns on capital employed. / AFRIKAANSE OPSOMMING: Sal maatskappye met lae afhanklikheid van fisiese bates, asook hoë winsgewendheid, maatskappye met die teenoorgestelde eienskappe uitpresteer in die mark? Ten spyte van ‘n gebrek aan empiriese navorsing, sal konvensionele wysheid voorstel dat dit so moet wees. Beleggers behoort winsgewende maatskappye bo minder winsgewende maatskappye te verkies, en laer kapitaalintensiewe bo hoë kapitaalintensiewe maatskappye. Die gebruik van kapitaalintensiteit en opbrengs op kapitaal aangewend (OOKA) in die beleggingsbesluit word ondersoek deur gebruik te maak van ‘n groot steekproef globale aandele oor die tydperk 1988 tot 2010. 'n Kwantitatiewe navorsingsbenadering was gevolg in die studie. Dit het die verdeling van die steekproef in vyf onderafdelings, of kwintiele, volgens die spesifieke maatstawwe (byvoorbeeld kapitaal-intensiteit) behels. Die totale opbrengs van 'n gelyk-geweegde portefeulje is vervolgens gemeet vir elke kwintiel vir die daaropvolgende 12 maande. Die portefeulje is jaarliks herbalanseer en die daaropvolgende 12 maande se opbrengs is aangeteken. Omdat verbeterde prestasie op nuwe kapitaalbeleggings langer kan neem as 12 maande om in aandeelpryse weerspieël te word, is kwintiel prestasie ook oor vyf jaar hou periodes gemeet. Die bevindinge van hierdie studie dui daarop dat daar geen beduidende verbetering in prestasie onder laer kapitaalitensiewe kwintiele oor een jaar houperiodes was nie. Die laagste kapitaalintensiewe maatskappye het egter oor ‘n hou periode van vyf jaar die hoogste gemiddelde opbrengs gelewer. Die hoogste OOKA maatskappye het die beste gevaar met jaarlikse herbalansering en met 'n houperiode van vyf jaar. 'n Portefeulje gefokus op lae kapitaalintensiteit en hoë winsgewendheid het 'n saamgestelde jaarlikse groeikoers gelewer wat 9,18 persentasiepunte hoër was as 'n portefeulje gefokus op die hoogste kapitaalintensiteit en die laagste OOKA. Oor houperiodes van vyf jaar was daar duidelike uitprestering deur lae kapitaalintensiewe ondernemings met hoë operasionele winsgewendheid. Hierdie resultate dui daarop dat die toekenning van beleggingskapitaal aan kapitaalintensiewe maatskappye met lae operasionele winsgewendheid waarskynlik langtermynopbrengste benadeel en dat 'n fokus op lae kapitaalintensiteit maatskappye, wat in staat is om 'n hoë opbrengs op kapitaal te genereer, moontlik meer lonend kan wees.

Thesis (PhD)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: The practice of combining single-factor multiples (SFMs) into composite multiples models is underpinned by the theory that various SFMs carry incremental information, which, if encapsulated in a superior value estimate, largely eliminates biases and errors in individual estimates. Consequently, the chief objective of this study was to establish whether combining single value estimates into an aggregate estimate will provide a superior value estimate vis-á-vis single value estimates. It is envisaged that this dissertation will provide a South African perspective, as an emerging market, to composite multiples modelling and the multiples-based equity valuation theory on which it is based. To this end, the study included 16 SFMs, based on value drivers representing all of the major value driver categories, namely earnings, assets, dividends, revenue and cash flows. The validation of the research hypothesis hinged on the results obtained from the initial cross-sectional empirical investigation into the factors that complicate the traditional multiples valuation approach. The main findings from the initial analysis, which subsequently directed the construction of the composite multiples models, were the following: Firstly, the evidence suggested that, when constructing multiples, multiples whose peer groups are based on a combination of valuation fundamentals perform more accurate valuations than multiples whose peer groups are based on industry classifications. Secondly, the research results confirmed that equity-based multiples produce more accurate valuations than entity-based multiples. Thirdly, the research findings suggested that multiples models that are constructed on earnings-based value drivers, especially HE, offer higher degrees of valuation accuracy compared to multiples models that are constructed on dividend-, asset-, revenue- or cash flowbased value drivers. The results from the initial cross-sectional analysis were also subjected to an industry analysis, which both confirmed and contradicted the initial cross-sectional-based evidence. The industry-based research findings suggested that both the choice of optimal Peer Group Variable (PGV) and the choice of optimal value driver are industry-specific. As with the initial cross-sectional analysis, earnings-based value drivers dominated the top positions in all 28 sectors that were investigated, while HE was again confirmed as the most accurate individual driver. However, the superior valuation performance of multiples whose peer groups are based on a combination of valuation fundamentals, as deduced from the crosssectional analysis conducted earlier, did not hold when subjected to an industry analysis, suggesting that peer group selection methods are industry-specific. From this evidence, it was possible to construct optimal industry-specific SFMs models, which could then be compared to industry-specific composite models. The evidence suggested that composite-based modelling offered, on annual average, between 20.21% and 44.59% more accurate valuations than optimal SFMs modelling over the period 2001 to 2010. The research results suggest that equity-based composite modelling may offer substantial gains in precision over SFMs modelling. These gains are, however, industry-specific and a carte blanche application thereof is ill advised. Therefore, since investment practitioners’ reports typically include various multiples, it seems prudent to consider the inclusion of composite models as a more accurate alternative. / AFRIKAANSE OPSOMMING: Die praktyk om Enkelfaktor Veelvoude (EFVe) te kombineer in saamgestelde veelvoudmodelle word ondersteun deur die teorie dat verskillende EFVe oor inkrementele inligting beskik, wat, indien dit in ’n superieure waardeskatting opgeneem word, grootliks vooroordele en foute in individuele skattings elimineer. Gevolglik was die hoofdoel van hierdie studie om vas te stel of die kombinering van verskeie enkelfaktor waardeskattings in ’n totale waardeskatting ’n superieure waardeskatting sal verskaf vis-á-vis enkelfaktor waardeskattings. Dit word voorsien dat hierdie proefskrif ’n Suid-Afrikaanse perspektief, as ’n ontluikende mark, sal bied aangaande saamgestelde veelvoudmodellering en die veelvoud-gebaseerde ekwiteitswaardasie-teorie waarop dit gebaseer is. Hiermee ten doel, sluit hierdie studie 16 EFVe in, gebaseer op waardedrywers wat al die vernaamste waardedrywerkategorieë, naamlik verdienste, bates, dividende, omset en kontantvloeie, verteenwoordig. Die bevestiging van die navorsingshipotese is afhanklik van die resultate soos bekom vanuit die aanvanklike dwarsdeursnee-empiriese ondersoek na die faktore wat die tradisionele veelvoudwaardasieproses kompliseer. Die hoofbevindinge van die aanvanklike ontleding, wat daarna rigtinggewend was vir die komposisie van die saamgestelde veelvoudmodelle, was die volgende: Eerstens, dui die bewyse daarop dat, wanneer veelvoude saamgestel word, veelvoude waarvan die portuurgroepe op ’n kombinasie van fundamentele waardasieveranderlikes gebaseer is, meer akkurate waardasies lewer as veelvoude waarvan die portuurgroepe op industrie-klassifikasies gebaseer is. Tweedens, het die navorsingsresultate bevestig dat ekwiteitsgebaseerde veelvoude meer akkurate waardasies lewer as entiteitsgebaseerde veelvoude. Derdens, toon die navorsingsbevindinge dat veelvoudmodelle wat saamgestel word uit verdienstegebaseerde waardedrywers, veral wesensverdienste (WV), hoër grade van waardasie-akkuraatheid bied in vergelyking met veelvoudmodelle wat saamgestel word uit dividend-, bate-, omset- of kontantvloei-gebaseerde waardedrywers. Die resultate van die aanvanklike dwarsdeursnee-ontleding is ook onderwerp aan ’n industrie-ontleding, wat die aanvanklike bevindinge van die dwarsdeursnee-ontleding beide bevestig en weerspreek het. Die bevindinge vanaf die industrie-ontleding dui daarop dat beide die keuse van optimale Portuurgroepveranderlike (PGV) en die optimale keuse van waardedrywer, industrie-spesifiek is. Soos met die aanvanklike dwarsdeursnee-ontleding, het verdienste-gebaseerde waardedrywers die top posisies by al 28 sektore wat ondersoek is, gedomineer, terwyl WV weer as die akkuraatste individuele waardedrywer bevestig is. Die superieure waardasie-resultate van veelvoude waarvan die portuurgroepe gebaseer was op ’n kombinasie van fundamentele waardasie-veranderlikes, soos afgelei uit die aanvanklike dwarsdeursnee-ontleding, het egter nie dieselfde resultate gelewer op ’n per sektor basis nie, wat aandui dat portuurgroep seleksiemetodes industrie-spesifiek is. Vanuit hierdie bevindinge was dit moontlik om optimale EFV-modelle saam te stel, wat dan vergelyk kon word met industrie-spesifieke saamgestelde veelvoudmodelle. Die bevindinge het voorgestel dat saamgestelde modellering gemiddeld jaarliks, tussen 20.21% en 44.59% meer akkurate waardasies gelewer het as optimale EFVmodellering oor die tydperk 2001 tot 2010. Die navorsingsresultate dui aan dat ekwiteitsgebaseerde saamgestelde modellering aansienlike toenames in waardasie-akkuraatheid mag bewerkstellig bo dié van EFVmodellering. Hierdie toenames is egter industrie-spesifiek en ’n carte blanche toepassing daarvan is nie aan te beveel nie. Gevolglik, aangesien beleggingspraktisyns se verslae tipies verskeie veelvoude insluit, blyk dit redelik om die insluiting van saamgestelde modelle as ’n meer akkurate alternatief te oorweeg.

Tam Wai-man Grace. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2001. / Includes bibliographical references (leaves 76-77). / Abstracts in English and Chinese. / Abstract --- p.ii / 序言 --- p.iii / Acknowledgement --- p.iv / Table of Contents --- p.v / Chapter Chapter 1 --- Introduction --- p.1 / Chapter Chapter 2 --- Literature Review --- p.7 / Chapter 2.1 --- Dividend Irrelevance Theory --- p.8 / Chapter 2.2 --- Bird-in-the-hand Theory --- p.9 / Chapter 2.3 --- Clientele Effect Theory --- p.10 / Chapter 2.4 --- Signaling Theory --- p.11 / Chapter 2.5 --- Agency Cost Theory / Chapter 2.5.1 --- Theoretical Models --- p.15 / Chapter 2.5.2 --- The Latest Agency Cost Model --- p.19 / Chapter 2.6 --- Residual Theory --- p.24 / Chapter 2.7 --- Other Studies on Dividend Policy / Chapter 2.7.1 --- Low-Regular-Dividend-Plus-Extras Policy --- p.26 / Chapter 2.7.2 --- Comparison of the Dividend Policies of Japanese and U.S. Firms --- p.27 / Chapter Chapter 3 --- Methodology / Chapter 3.1 --- Model --- p.28 / Chapter 3.2 --- Anti-Signaling Hypothesis --- p.29 / Chapter 3.3 --- Agency Cost Hypothesis --- p.30 / Chapter 3.4 --- Residual Hypothesis --- p.31 / Chapter 3.5 --- Investment Opportunities Hypothesis --- p.32 / Chapter 3.6 --- Industry Control --- p.33 / Chapter 3.7 --- The Four-Hypothesis Model --- p.34 / Chapter Chapter 4 --- Sample and Data Description / Chapter 4.1 --- Sample Description --- p.35 / Chapter 4.2 --- Variable Description --- p.36 / Chapter 4.3 --- Limitations --- p.39 / Chapter 4.4 --- Descriptive Statistics --- p.41 / Chapter Chapter 5 / Chapter 5.1 --- Regression Results and Implications --- p.42 / Chapter 5.2 --- Alternative measurement for Agency Cost Hypothesis --- p.45 / Chapter 5.3 --- Comparison of the Dividend Policies of Hong Kong and the World --- p.47 / Chapter Chapter 6 --- Conclusion --- p.49 / Tables / Table 1 Summary of the Four-Hypothesis Model --- p.50 / Table 2 Construction of Variables --- p.51 / Table 3 Dividend Payout Ratios of 83 Hong Kong Listed Firms from1992 to 1999 --- p.52 / Table 4 Earnings Growth Rate of 33 Hang Seng Index Constituents from 1996to 1999 --- p.54 / Table 5 Dividend Payout Ratio of 33 Hang Seng Index Constituents from 1996 to 1999 --- p.55 / Table 6 Regression Results for Raw Data --- p.55 / Table 7 Regression Results using Substantial Shareholders Concentration as Proxy for Agency Cost Hypothesis --- p.57 / Table 8 Summary of Regression Results --- p.58 / Charts / Chart 1 Dividend Payout Ratios of 83 Hong Kong Listed Firms from1992 to 1999 --- p.59 / Chart 2 Earnings Growth Rate of 33 Hang Seng Index Constituents from 1996 to 1999 --- p.60 / Chart 3 Dividend Payout Ratio of 33 Hang Seng Index Constituents from 1996 to 1999 --- p.60 / Appendices / Appendix 1 The Complete Dataset --- p.61 / Appendix 2 Definition of Variables in Different Sectors --- p.63 / Appendix 3 Non-Nested Tests --- p.54 / Table A3.1 Non-Nested Tests Results --- p.65 / Table A3.2 Non-Nested Test Statistics and Choice Criteria - Anti-signaling Hypothesis vs Agency Cost Hypothesis --- p.66 / Table A3.3 Non-Nested Test Statistics and Choice Criteria - Anti-signaling Hypothesis vs Residual Hypothesis --- p.67 / Table A3.4 Non-Nested Test Statistics and Choice Criteria 一 Anti-signaling Hypothesis vs Investment Opportunity Hypothesis --- p.68 / Table A3.5 Non-Nested Test Statistics and Choice Criteria ´ؤ Residual Hypothesis vs Agency Cost Hypothesis --- p.69 / Table A3.6 Non-Nested Test Statistics and Choice Criteria ´ؤ Agency Cost Hypothesis vs Investment Opportunity Hypothesis --- p.70 / Table A3.7 Non-Nested Test Statistics and Choice Criteria ´ؤ Residual Hypothesis vs Investment Opportunity Hypothesis --- p.71 / Table A3.8 Non-Nested Test Statistics and Choice Criteria ´ؤ Agency Cost Hypothesis vs Anti-signaling Hypothesis --- p.72 / Table A3.9 Non-Nested Test Statistics and Choice Criteria ´ؤ Agency Cost Hypothesis vs Residual Hypothesis --- p.73 / Table A3.10 Non-Nested Test Statistics and Choice Criteria ´ؤ Agency Cost Hypothesis vs Investment Opportunity Hypothesis --- p.74 / Table A3.11 Non-Nested Test Statistics and Choice Criteria 一 Technology Industry Phenomenon vs Anti-signaling Hypothesis --- p.75 / Bibliography --- p.76

The purpose of this study was to determine whether publicly disclosed violations by U.S corporations, resulting in convictions or settlements, erode shareholder investment in the offending organizations. This study was designed to assess whether or not the shareholders' reactions to corporations' violations were related to a decline in organizations' stock valuations across sectors. In addition, this study attempted to assess whether or not shareholder support, expressed by stock prices, declined more after a corporation was prosecuted or reached a settlement for violations, as compared to corporations that disclosed earnings disappointments. Also, this study investigated the stock prices of violating corporations compared to the non-offending corporations from within the same business sector, as well as considered the percentage decline for repeat offenders for violation two compared to violation one. Opposite to hypothesis, results showed that stock prices for the violating companies were significantly greater 12 months after the violation compared to the other months and no significant differences in percent decline between the eight sectors on any of the five decline measures. There were also no differences between violating companies and their matched companies. Companies with a violation had significantly greater stock prices overall than those without a violation.