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Sunday, June 28, 2020

Study Of The Reasons Behind Company Name Changes Finance Essay - Free Essay Example

A companys name is commonly considered to be a curial part of its image and reputation, just like the quality of its products or the quality of its services and it is also widely accepted that the corporate name is the cornerstone of a companys relationship with its customers. (McNamara, 1998). Changing a companys name is a major policy decision contemplated by many firms and actually implemented by some year. Such name changes are sometimes a result of mergers or acquisitions to better describe the new combined business, and sometimes an attempt to acquire a new image and corporate identity. However, the process of changing a corporate name is painstaking, risky, and costly, therefore, name changes will not be initiated unless expected benefits outweigh expected costs (Bosch, 1989). Thus, the stock price reaction surrounding a corporate name change can be regarded as the name change effects. However, some ambivalent evident has appeared in the few studies that have considered the effect of name change on firm value. Horsky and Swyngedouw (1987) find that name change announcements can generate positive stock return. Bosch (1988) and Karpoff(1994) maintain that the name change effects are significantly positive before the announcement days but become insignificant after the announcement. Paul (1997) finds the name change effects have a significant effect on the service industry firms. Simil arly, Lee (2001) and Cooper (2001) find name change effects are large and significant positive for those firms which add .com into their name. 2 LITERARURE REVIEW Bosch and Hirschey (1989) collect 392 firms who change names from 1979 to 1986 period in Wall Street Journal (WSJ). After concerning other concurrent event such as announcement of merger and acquisition, stock split, the final sample just includes 79 name change firms. The methodology used to examine the abnormal return around the announcement actually is the market model event study. The market portfolio is the CRSP value-weighted index and the parameters are estimated over a 180-day period beginning 200 days before the announcement date and ending 21 days beforeÃƒâ€šÃ‚ ¼Ãƒâ€¹Ã¢â‚¬ -200Ãƒâ€šÃ‚ ¼Ãƒâ€¦Ã¢â‚¬â„¢-21Ãƒâ€šÃ‚ ¼Ãƒ ¢Ã¢â€š ¬Ã‚ °. After the test, they find that the cumulative average return (CAR) is 0.33% but insignificant for the whole event period (-10, +10). For 10 days before the name change announcement, the CAR is significantly positive with value of 2.3%, in contrast, for 10 days after the announcement, the CAR is significantly negative with -1.97%. Moreover, on the d ay of name change, the return of 0.53% is positive but insignificant. Then, the sample is further classified into 32 major and 47 minor name changes. Major name changes are whose new names are entirely different from the old, such as Varity Corp. versus Massey-Ferguson Ltd., and minor name changes would not completely affect company recognition, such as Lowen-stein M.Corp. versus M. LowensteinSons Corp. For major name changes, there is no significant effect; and Minor changes generate a significantly 0.75% positive return on the day of announcement, and also have a significantly 1.25% positive effect 5 days before the announcement. Therefore, they conclude that a positive market reaction to name change announcement is found for the overall sample but the effect is statistically weak and all firms negative valuation effects in the post-announcement period largely eliminate beneficial effects appeared during the announcement period. Karpoff and Rankine (1994) use a comparatively la rger sample of 147 firms announced name change from 1979 to 1987 in WSJ. Compared with the previous study, they mention that the WJS is not always the first public disclosure of the plan to change the companys name. Therefore the sample is divided into 4 different categories. There are 88 firms for the name change was mentioned or proposed in a proxy statement before the WSJ announcement; 87 firms refer to no concurrent announcement in the event period; 59 firms for no mention of name change in a prior proxy statement and 36 firms for which the WJS press date is not preceded by a proxy statement announcement of the name change and have no other announcements during the event period. The methodology here is also market model event study, differently; the parameters are estimated over a 200-day period beginning 31 days after the announcement date and ending 230 days after (+31, +230). The result is consistent with the Bosher (1989) and they find that the name change effect impark a si gnificantly positive cumulative return of 4.8% for 30 days before the announcement, but has no significant effect for the post-announcement. The CAR for When the authors take a close look on the 36 firms which have no concurrent event, they find those firms can generate a significant positive return of 1.56% in the two-day (-1,0 ) announcement period but yield no effect after the announcement. Therefore, this study fails to support the hypothesis that name change announcements increase shareholders wealth. Paul (1997) argue that the major problem for the previous studies is that none of them distinguished between the services and manufacturing industries. So their results may bias. He has some explanatory, such as firms in the manufacturing sector produce tangible products such as clothes, cars, computers etc. Therefore, a corporate name change signaling means a change in the direction of the firm and the quality of its products can be verified by examining the product, in contra st, the offering of service producers cannot easily achieve such verifications. Based on this, the sample only includes 28 firms from 1980 to 1990 in the service industry and the firms which changed their name because of mergers and acquisitions are excluded. Unlike the previous studies which use the market model event study approach, this study uses the trend analysis method. They focus on the trend of price per earnings ratio (P/E) because it is a good indication of the desirability of the firms share and eliminates possible size effects. They obtain P/E for five years before and after the name change for each firm and align all the events in time-order. The hypothesis is that if corporate name change signaling is effective, then post-event P/E ratios will be on average higher than pre-event P/E ratios. Finally, the trend analyses show that, on average, post-event P/E ratios are significantly higher than the pre-event P/E ratios. Therefore, corporate name change has a positive eff ect on firm in the services industry. Cooper, Dimitrov and Rau (2001) examine the effect of one particular form of corporate name change which firms add .com to their names. Concerning the concurrent announcement, the sample includes 95 publicly traded companies on the NYSE, AMEX, Nasdaq, and the OTC Bulletin Board (OTCBB) that changed their names between June1, 1998, and July 31, 1999. The new name has to be either a dotcom name (such as, Wareforce.com), a dotnet name (Docplus.net Corporation) or has to include the world Internet in it (e.g., Internet Solutions for Business Inc.) the sample is further classified into 4 different groups: (1) Pure internet companies, which do all their business on the internet; (2) Companies that have some prior involvement with the internet and change their name to better reflect this involvement; (3) Companies that change their focus from non-internet related business to internet-related; (4) Companies whose core business is not internet-related . Besides using the similar event study approach which parameters are estimated over a 151 days period from 30 days before the announcement and 120 days after, the author also use price-matched control group of firms to calculate the abnormal returns. That is, choosing 95 firms which did not change their names during the time period and also their price is the closest to the dotcom sample firms. Inconsistent with the previous studies, the results show that over a five-day period (-2, +2), all firms earn a strongly statistically significant abnormal return of 53%. Moreover, the name change effects of internet-related firms are the biggest which is significantly positive with 105% and the name change have the greatest long-horizon (+1, +120) effect for non-internet related firms with the value of 243%. Over the entire period from (-30, +30), all firms earn a significant return of 89% and there is also no significant reduction on CARs from day (+1, +120). Inconsistent with Bosch (1989) and Karpoff( 1994) who find a small initial positive stock price reaction to name changes is reversed within a few trading days after the announcement date. The finding suggest that firms change their name to a dotcom can experience a permanent value increase. The authors mention that maybe this is due to mania-investors seem to be eager to be connected with the Internet at all costs and this hypothesis is supported by the fact that the non-internet related firms experience the greatest long-horizon returns for the name change effects. Three years after, Cooper, Khorana, Osobov and Rau (2004) examine the stock price reactions to Internet related name changes which are .com additions and deletions in a market downturn. A sample of 183 firms that add a dot.com and 67 firms that delete a dot.com is collected from NYSE, Amex, Nasdaq, and the OTC between Jan 1, 1998 and Aug 31, 2001. The sample is divided into period of hot versus cold markets which use an empirical proxy Amex [email protected]@citve Index to measure. To be conservative, they use three different data which are Feb 1, 2000, Sep 1, 2000 and Apr 1, 2001 as the cutoff date. In order to test whether the price reaction is related to the type of name change, the sample is further separated into two types of name changes. Minor name changes refer to a firm merely adds to or deletes a dot.com from its name and Major name changes refer to a firm not only adds to or deletes dot.com from its name but also changes its name altogether. Using the same method as the previous one, the authors find no significant marker reaction towards to the hot Internet period (Pre-Feb, 2000) for dot.com deletions. In contrast, the cumulative return over the whole period (-30, +30) is significant positive with 64% after Feb, 2000. Moreover, the effect of major changes is significantly greater than the minor changes. When using a cutoff date of Sep 1, 2000, the CAR goes up to 70.2% and continues to increase to 77.5% when using the date of April, 2001. Finally, they also find the results for dot.com additions obtained by the previous study also hold in an out-of-sample period. To be more persific, the CAR for all dot.com additions from Jan, 1998 to Aug, 1999 is significantly positive with 118.6% and the major name changes have greater effect than the minor name changes on the stock price. In the boom period (Pre-Feb, 2000), the effect of dot.com additions is significantly positive with 101.8% but have no significant impact in the bust period (Post-Feb, 2000). Therefore, firms that change their name to a dot.com name in the internet boom period and delete the dot.com from their name in the internet slump period can generate large gains in shareholder wealth. 3 CONLUSION Almost all the above studies are using market model event study to measure the abnormal return. As Fama, Fisher, Jensen and Roll (1969) who first used the event study methodology to estimate the effect of the announcement of a stock split on stock prices, this methodology was widely used as an effective approach to measure the abnormal return over the event period when the value of information announced. Some implications can be drawn from the above studies. Firms can generate a significantly positive return before the announcements of name changes. Bosch (1989) and Karpoff (1994) state that the market reaction to name change announcement is positive but statistically weak as all firms negative valuation effects in the post-announcement period largely eliminate beneficial effects appeared during the announcement period. The WSJ does not publish all the news, and sometimes the news is out in other forms before it is published, so there may have a limitation in the study of Bos ch (1989) as he just uses WSJ to define the event date, therefore the results maybe bias. Although Karpoff(1994) fits this limitation, he finds the same results. Even though event date uncertainty will be a problem, the event study design is still effective. Testing accumulated excess returns over a slightly longer period allows a research to detect events without precisely examine the timing of the event. (Glenn,1990) The market may react positively just for some particular name changes in some industry. Inconsistent with Bosch (1989) and Karpoff(1994), Paul (1997) finds a significantly positive name change effect on the stock market. Cooper (2001) finds firms can experience significantly great long-horizon returns for the name change effects which add .com to their old names. Some irrational investor behavior may exist in the stock market and some manager may take advantage of this irrationality to time corporate events such as name changes. During Internet Fever, when inves tors take internet as important to how business will be managed in the future and firms also want to be identified with the internet, so .com suffix can identifies a firm with the internet, sending a clear and unambiguous signal to shareholders and the general investing public. Since internet firms may be perceived as having great potential about long-run growth and profitability, investor may be more likely invest in the firms with the announcement of .com name changes and this will contribute to an increase in stock prices and trading activity. Based on the result of Cooper (2001), Stock prices of all internet firms may be irrationally high and name change effects bring a significantly positive return of 118.6%. After testing that the non-internet related firms experience the greatest long-horizon returns for the name change effects, the behavior of Investors buying and selling activity toward firms which change their names may reflects that investors are irrationally influenced b y cosmetic effects. It is difficult to believe that investors get no information about stock holdings over the event time period. Also, Cooper (2004) examines the different stock reactions towards .com deletions and additions in internet boom and slump period. Firms that change their name to a dot.com name in the internet boom period and delete the dot.com from their name in the internet slump period both can generate large gains in shareholder wealth. In the sample, firms which add .com to their names occur mostly in the internet boom period and delete .com to their old names occur mostly in the internet slump period. It seems that firms are all obviously too eager to be detected as an Internet company while dot.com market valuations were increasing fast, but not willing to be connected with the Internet sector once it became perceived as slump. According to this, we may surmise that smart managers rationally take advantage of investors irrational behavior and do in fact try to tim e corporate events to make full use of both positive and negative investor opinions.

Saturday, May 23, 2020

Women s Experiences During The Holocaust - 898 Words

While womenÃ¢â‚¬â„¢s experiences during the Holocaust were not entirely different from those of men, it would be false and misleading to assert that they were identical. There were many instances in which an individualÃ¢â‚¬â„¢s ordeal was shaped by his or her gender and it is only by understanding what was unique to women and children, and what was unique to men, that we can provide a complete account of what occurred during the Holocaust. One of the reasons it took so long for historians to comprehend the importance of these perspectives is because women were busy rebuilding their lives after the Holocaust. It wasnÃ¢â‚¬â„¢t until the 1970s when feminist scholarship was sparked, that there became an interest in the stories of women survivors. Eventually, after the women were able to put their lives back together and raise their children, it became important for them to share their memoirs. One source of gender difference during the Holocaust experience women had more anticipatory reactions towards Nazi danger. In Germany, even before the 1938 Kristallnacht pogrom, it was often the women who had to assume new roles to rescue other family members. It was assumed that the Nazis would not harm women, so it was typically women who went to the police, the SS and the municipality to protest haphazard actions against their children and families and to secure the release of husbands and sons who had been detained or arrested. In organizing and arranging the details of everyday life, such as who shouldShow MoreRelated Women and the Holocaust Essay example706 Words Ã‚ |Ã‚ 3 PagesWomen and the Holocaust nbsp;nbsp;nbsp;nbsp;nbsp;The Jewish female is like the ovule of a flower, it spreads its seeds to create future generations. It is known that the true root of a Jewish person lies in the hands of his/her mother. 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Tuesday, May 19, 2020

Do Bug Zappers Kill Mosquitoes

Mosquito bites arent just an annoyance; they can be deadly. Mosquitoes transmit serious diseases, from malaria to West Nile virus. If youre planning to spend any time outdoors, you should protect yourself from mosquito bites. Many people hang insect electrocution lights, or bug zappers, in their backyards to kill biting insects. Unfortunately, research shows that most bug zappers do little to eliminate mosquitoes. Worse, they are more likely to eliminate beneficial insects that provide food for birds, bats, and fish. How Bug Zappers Work Bug zappers attract insects using ultraviolet light. The light fixture is surrounded by a mesh cage, which is energized with a low-voltage current. Insects are drawn to the UV light, attempt to pass through the electrified mesh, and are subsequently electrocuted. Most bug zappers are designed with a collection tray where the dead insects accumulate. From dusk until dawn, homeowners with bug zappers hear the satisfying crackle of insects meeting their maker. How Mosquitoes Find Blood When evaluating mosquito control products, its important to understand how mosquitoes locate a source of blood. In other words, think about how the mosquito finds someone to bite. Regardless of whether theyre human, canine, equine, or avian, all living blood sources emit carbon dioxide. Mosquitoes, like most biting insects, can home in on the scent of carbon dioxide in the air. Research suggests a bloodthirsty mosquito can detect carbon dioxide from as far as 35 meters away from its source. At the slightest hint of CO2, the mosquito begins flying in zigzags, using trial and error to pinpoint the person or animal in the area. Carbon dioxide is the most powerful attractant for mosquitoes. Mosquitoes also use other scent clues to find people to bite. Perfume, sweat, and even body odor can attract mosquitoes. Research Proves Bug Zappers Are Ineffective for Killing Mosquitoes Bug zappers attract insects using ultraviolet light. Mosquitoes find their blood meals by following the trail of carbon dioxide. Occasionally, a mosquito will get curious about the pretty light and make the fatal mistake of getting too close. But theres no guarantee that mosquito is even a female, and thereforeÃ‚ a biting mosquito. In fact, many of the mosquitoes found in bug zappers are actually nonbiting insects called midges. In 1977, researchers from the University of Guelph conducted a study to determine how effective bug zapper products are at killing mosquitoes and reducing mosquito populations where they are used. They found that just 4.1% of the insects killed in the bug zappers were female (and therefore biting) mosquitoes. The study also found the yards with bug zappers had higher numbers of female mosquitoes than those without bug zappers. University of Notre Dame researchers conducted a similar study in 1982, with similar results. In an average night, a single bug zapper in South Bend, Indiana, killed 3,212 insects, but only 3.3% of the dead insects were female mosquitoes. In addition, these researchers found that the UV light seemed to draw more mosquitoes to the area, leading to more mosquito bites.Ã‚ In 1996, researchers at the University of Delaware tallied an entire summers worth of dead bugs from bug zappers. Of a total of 13,789 insects killed in the bug zappers, a paltry 0.22%Ã‚ of them were biting mosquitoes or gnats. Worse, almost half of the dead insects were harmless, aquatic insects, an important food for fish and other stream inhabitants. These insects help control pest insect populations, meaning bug zappers could actually make pest problems worse. Scientists at the UF/IFAS Florida Medical Entomology Laboratory in Vero Beach, Florida, also examined the effectiveness of bug zappers in 1997. A single bug zapper in their study killed 10,000 insects in one night, but just eight of the dead bugs were mosquitoes. New Octenol Bug Zappers In recent years, a new type of zapper has appeared on the market that uses carbon dioxide and octenolÃ¢â‚¬â€a nontoxic, pesticide-free pheromoneÃ¢â‚¬â€to attract mosquitoes. Logically, this new type of zapper should attract and kill more mosquitoes, leaving your yard pest-free. Unfortunately, studies show that octenol does little to increase the number of mosquitoes killed per night. Instead, it attracts even more mosquitoes to your yard, while killing about the same number of pests as a strip of sticky tape. Study after study has proven that bug zappers do very little or nothing at all to put a dent in the biting mosquito population. On the other hand, limiting mosquito breeding habitat and using appropriate mosquito deterrents like DEET does protect you from mosquito bites, and from the diseases mosquitoes carry. Sources Surgeoner, G. A., and B. V. Helson. 1977. A field evaluation of electrocutors for mosquito control in southern Ontario. Proc. Entomol. Soc. Ontario 108:53Ã¢â‚¬â€œ58.Nasci, RS, CW. Harris and CK Porter. 1983. Failure of an insect electrocuting device to reduce mosquito biting. Mosquito News. 43:180Ã¢â‚¬â€œ184.Frick, TB and DW Tallamy. 1996. Density and diversity of nontarget insects killed by suburban electric insect traps. Ent. News. 107:77-82.University Of Florida, Institute Of Food Agricultural Sciences, 1997. Snap! Crackle! Pop! Electric Bug Zappers Are Useless For Controlling Mosquitoes, Says UF/IFAS Pest Expert Accessed September 4, 2012.