Abstract This thesis is composed of three models that imply the impact of managers¡¦ characteristics on investment under asymmetric information. The first one regards insider as managers and formulates a model to explain the positive relationship between cash flow and capital expenditure of a firm, and tries to synthesize the ¡§asymmetric information hypothesis¡¨(Myers and Majluf, 1984) and the ¡§free cash flow hypothesis¡¨(Jensen, 1986) by insider ownership. The finding demonstrates that in instances with low percentage of insider ownership, the free cash flow hypothesis will better explain the positive relationship between cash flow and capital expenditure and will have the phenomenon of over-investment. On the other hand, when the percentage of insider ownership is high, the asymmetric information hypothesis is better suited to explain this relationship and will have the phenomenon of the under-investment. The second one formulates a model to synthesize the ¡§reputation effect¡¨ and ¡§asymmetric information hypothesis¡¨ through considering the outsider investors¡¦ evaluation of the firms in terms of firms¡¦ reputation and firms¡¦ private information. This study concludes that the good type firms with low reputation will show the behavior of under-investment and the bad type firms with high reputation will have the phenomenon of over-investment. Moreover, the model demonstrates that both the phenomena of under-investment and of over-investment are caused by the conflict between the firms and the outsider investors. At last, this study implies that the effect of reputation has an influence on the choice of financial tools for the good type firms but does not have an influence on that of the bad ones. This study presents a general model to explain two types of investment inefficiency under the effect of reputation in a reasonable mode. The last one formulates a model to synthesize the ¡§bias effect¡¨ and ¡§reputation effect¡¨ through considering the fact that the CEO in the interest of firm is in favor of a certain project and that junior managers concern their reputation. This study concludes that the CEO¡¦s bias will influence the project that the managers suggest and does not necessarily lead to the direction of bias. The untalented managers will be affected more seriously than talented managers. Moreover, the model combines ¡§bias effect¡¨ with ¡§asymmetric information hypothesis¡¨ and implies that the bias can alleviate the problem of under-investment under certain circumstances. This finding shows that the bias is not always a negative factor of investment efficiency.

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After semiconductor industry, TFT-LCD technology has become the other valuable technique for Taiwan to play an important role in the world. Both government and investors have already spent lots of effort to make it grow during last decade. To be able to increase the competitive, we are looking forward to merge the TFT-LCD manufactories. This paper focuses on the market expectation of merge of TFT-LCD industry in Taiwan. This paper has use two stock market public corporate, A.U.O. and Q.D.I, as our study and observation models and by applies the L-G model from Kermit D. Larson and Nicholas J. Gonedes, we will be able to prove the concept and examine our observation cases. On the other hand, I use the free cash flow model from Damodaran to evaluate the capital value for both companies. In particular, we examine them in three different scenarios to analysis their firm-value and use them as the ratio for future stock merge between both companies. By simulate our observation models and experiment for their fair market value; we will be able to demonstrate the L-G model is appropriate in this particular circumstance. According to the result and demonstration of cases study, it can provide the new prospective of Taiwan TFT-LCD industry in the future.

In light of the limitations of cost and profit centers, this research attempts to explore how enterprise N integrates managerial information and thus transforms into the concept of an investment center. The BCG matrix (Boston Consulting Group¡A1970) is adopted as the major analytical tool in this study. With this tool we are able to acquire the market attractiveness and profitability of enterprise N, its business units, and its subsidiaries, so as to facilitate business resource allocation. The FCF analysis reveals the balance of funds between individual business units, subsidiaries, and the enterprise as a whole. Calculation of EVA reveals the contribution that each business unit and subsidiary makes to the enterprise. We furthermore interview executives in order to verify the preliminary result of the BCG model. We also adopt SWOT analysis to investigate the strengths, weaknesses, opportunities, and threats of each business unit located in the respective quadrant of the BCG model. Thus, we may be lead to understand the fund allocation and strategic intention of respective business units and subsidiaries. Finally, we conclude and make suggestions for enterprise N, both regarding financial and strategic aspects. This study aims to find out the key success factors regarding how enterprise N makes and executes business resource allocation and synergy development. We hope that this case study may provide valuable information and serve as a refined tool of business analysis for enterprise N.

Evaluation of the real price for financial assets has been an important issue. This thesis used four approaches, namely free cash flow method, dividend discount method, C.R.R Binomial Numerical Analysis of real-option theory and capital-budgeting techniques, to evaluate the real value of REITs in Taiwan. Fubon No.1, Cathy No.1, Shin Kong No.1 are chosen as cases to study in this thesis. This thesis analyzes their financial statements and historical data to estimate the parameters in those models and compute the real price of REITs. Our empirical results show that the real prices estimated from the free cash flow approach are higher than market prices by 30%. The real prices from the dividend discount method are higher than average market price by 300%.The real prices from the third approach, present value method, are higher than market prices by 10%. After considering the opportunities managers hold by the real-option approach, the real prices are higher than the market value by 200%. These results suggested the current prices of REITs in Taiwan are undervalued. It appears that anchoring tendency might be an explanation that prices of REITs in Taiwan are fixed in certain levels.

This article examines announcement effects of 240 international joint ventures (IJVs) undertaken by US firms to ascertain their impact on shareholders' wealth. The objective is to ascertain whether the mixed results of announcement effects reported in the literature can be explained. Theory suggests that IJVs would result in differential stock price reactions due to firm-specific characteristics. Therefore, it is hypothesized that IJVs would elicit a positive stock price reaction, on average. Also, it is hypothesized that this reaction should be greater for high Tobin's q firms and for low free cash flow firms. Empirical analysis reveals that firm-specific characteristics do influence announcement effects and suggests that these factors may explain the mixed announcement effects documented in the literature.

A crescente atuação da sociedade nos processos de discussão e de tomada de decisões relacionados com as políticas públicas incentiva a gestão pública no Brasil a buscar mecanismos para demonstrar eficiência e transparência na aplicação de recursos. Dentro da esfera pública, o gasto social destinado às ações compensatórias é destaque em termos de alocação de recursos, por isso apresenta acentuada necessidade de planejamento, avaliação e prestação de contas. Diante deste contexto, este trabalho adotou o modelo conceitual da Teoria Residual dos Dividendos, estabelecido por Modigliani e Miller (1958) e revisitado por de Jensen (1986) na Teoria Free Cash Flow, e teve como objetivo principal evidenciar o Fluxo de Caixa Livre para o Cidadão (FCLC) gerado e distribuído por uma entidade pública, segundo os preceitos do resultado econômico. Para consecução deste propósito, conduziu-se um levantamento bibliográfico crítico, constatando similaridade e aderência nas discussões conceituais e nos estudos aplicados acerca da relação/trade-off entre distribuição de excedentes de caixa e capacidade de reinvestimento nas esferas público e privada. Além disso, foi constatado que a Teoria Residual dos Dividendos e sua discussão sobre o Fluxo de Caixa Livre do Acionista podem ser consideradas aplicáveis à mudança do objeto de foco (acionista para cidadão), mantendo-se suas premissas iniciais. Assim, a partir do levantamento bibliográfico, pode-se propor o constructo teórico Fluxo de Caixa Livre para o Cidadão (FCLC). A fundamentação teórica explanou que a evidenciação do FCLC pode demonstrar como as entidades públicas têm gerado excedente de caixa aos cidadãos: quando da prestação de serviço aos cidadãos e/ou por transferências diretas ações compensatórias. Adicionalmente, conduziu-se um caso de estudo na USP Ribeirão, com o objetivo central de ilustrar uma possível aplicação do constructo, além de evidenciar de forma os gestores das entidades públicas podem aprimorar o processo de prestação de contas (accountability) utilizando o FCLC, considerando a percepção de um gestor. Esta pesquisa pode ser aplicada em estudos empíricos, com o intuito de compreender e descrever o atual estágio de evolução do processo de avaliação econômica e de prestação de contas dos investimentos públicos, e, fundamentalmente, validar o constructo FCLC. Acredita-se que este trabalho tenha contribuído para indicar possibilidades no processo de prestação de contas no setor público, para que o cidadão tenha condições de discernir os benefícios recebidos de forma direta, via ações compensatórias, dos benefícios recebidos pela prestação de serviços, como educação e saúde. / The growing participation of society in the discussion and decision making processes related to public policies has stimulated public managers in Brazil to seek mechanisms to show efficiency and transparency in the use of income. Within the public sector, the social expenditure destined to cash transfers stands out in terms of allocation of income; thus, it bears strong need for planning, evaluation and accountability. In this context, this work used the conceptual model of the Residual Theory of Dividends established by Modigliani and Miller (1958), and revisited by Jensen (1986) in the Free Cash Flow Theory, and aimed at disclosing the Free Cash Flow to Citizen (FCFC) generated and distributed by a public entity, in accordance with the rules of the economic result. In order to do so, a critical bibliographic review was carried out, and it revealed the similarity and adherence in the conceptual discussions and in the applied studies concerning relationship/trade off between distribution of cash surplus and capacity to re-invest in both the public and the private sectors. Moreover, it was possible to observe that the Residual Theory of Dividends and its discussion of Free Cash Flow to Shareholder may be considered applicable to a change in focus (from shareholder to citizen) and keep its initial presuppositions. This way, having the bibliographic review as the origin, it is possible to propose the theoretical construct Free Cash Flow to Citizen (FCFC). The theoretical framework explained that the disclosure of FCFC may demonstrate how public entities have generated cash surplus to citizens: with service rendering or by cash transfer programs compensation transfers. Additionally, a case study was carried at USP Ribeirão, whose core aim was not only to illustrate a possible use of the construct, but also to unveil in what way managers of public entities may improve the accountability process using FCFC, considering the managers viewpoint. This research may be used in empirical studies aiming at understanding and describing the present stage of evolution of the processes of economic evaluation and accountability of public investments, as well as to validate the FCFC construct. It is our belief that this work may have contributed to indicate possibilities within the process of accountability in the public sector, so that citizens may distinguish benefits received directly, by means of cash transfer programs, from the ones received through the rendering of services, such as education and health.

Cílem práce je nastínit možný postup predikce vývoje budoucí hodnoty konkrétní firmy. Teoretická část představuje metody analýzy firemní výkonnosti, postup sestavení dlouhodobého finančního plánu a metodu stanovení hodnoty firmy na základě prognózovaných volných peněžních toků. Praktická část aplikuje metody vyložené v teoretické části na realitu firmy. Je provedena finanční analýza společnosti a podle jejích výsledků navržen dlouhodobý finanční plán. Poté je stanovena budoucí hodnota firmy podle plánu prostřednictvím predikovaných volných peněžních toků (free cash flow). Na závěr je cílová situace srovnána s výchozí situací a na základě tohoto srovnání je zhodnocena úspěšnost navrženého plánu.

Problem: Is the free cash flow a value relevant accounting measure in relation to the Swedish stock market? Objective: The aim is that by using an investment strategy to examine whether the free cash flow is an accounting measure that could be perceived as value relevant in relation to the Swedish stock market. Method: The paper is based on a quantitative survey of empirical evidence that has been collected from companies listed on the Large and Mid-Cap lists of the Swedish stock market. Theoretical Frame of reference: value relevance, cash flow, portfolio theory, drive theory Results: It was concluded that the study results conform to the Finnish survey results. The portfolio shows higher returns than the OMX index.

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