“The contribution of behavioural finance theory is said to be of critical importance in understanding investor behaviour in modern finance” INTRODUCTION According to Gregory Curtis (2004‚ pg 16)‚ Sometime we behave like perfect economic beings. But other times we behave like‚ well‚ human beings. We make decisions on the basis of biases that don’t reflect real world facts. We allow our responses to decisions to depend on how the questions are framed. We engage in complex mental accounting‚ ignoring
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o In finance‚ banking refers to the activities of banks and related organizations. Banking organizations include commercial banks‚ central banks‚ investment banks and any other institution that lends money‚ including credit unions and credit card companies. Good dissertation banking topics examine how banks create and maximize wealth through loans and other financial instruments. Examples include loan risk assessment models‚ money creation and fractional reserve banking. Corporate Finance o Corporate
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SME finance is the funding of small and medium sized enterprises‚ and represents a major function of the general business finance market – in which capital for different types of firms are supplied‚ acquired‚ and costed or priced. Capital is supplied through the business finance market in the form of bank loans and overdrafts; leasing and hire-purchase arrangements; equity/corporate bond issues; venture capital or private equity; and asset-based finance such as factoring and invoice discounting.
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SOURCES OF FINANCE There are various sources available to meet short term needs of finance. The different sources are discussed below: 7.1 Trade Credit: It represents credit granted by suppliers of goods‚ etc.‚ as an incident of sale. The usual duration of such credit is 15 to 90 days. It generates automatically in the course of business and is common to almost all business operations. It can be in the form of an ’open account’ or ’bills payable’. Trade credit is preferred as a source of finance because
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Solution: i. Establishment of estimated growth rate in earnings and dividends. XYZ Company’s current EPS is $4.75. It was $3.90 a year ago. The company pays out 35% of its earnings as dividends‚ and the stock sells for $45. a. Calculate the past growth rate in earnings. b. Calculate the next expected dividend. Assume that the past growth rate will continue Answer: If payout ratio is constant‚ then dividend growth rate will be same as earnings growth rate. a) dividend growth rate over
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Art as a documentary tool highlighting the contrast between the brutality of poverty and the beauty of art as inspired by Jonathan Darby’s art in my art work “The Window of Poverty”. In the world today there are more poverty stricken people than rich people and yet society tends not to see them as part of society. Children that live on the streets are seen as being invisible and yet they will one day be a big part of society‚ in either a good or a bad way‚ depending on what path they will take
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James Bain and Jonathan Barr were convicted for crime they have never committed. Like many others‚ false allegations cause innocent individuals to be arrested for crimes they have not committed. Results from DNA testing have been used as great evidence to help people reach their freedom from being behind bars. To prevent the conviction of innocent individuals‚ DNA tests should be mandatory to take when proving one’s evidence. James Bain was a man who was arrested without any DNA evidence to prove
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Jonathan Swift’s Ideal Society Gulliver’s Travels‚ written by Jonathan Swift‚ is a literary satire written in the 1700’s. Swift separates the story into four parts where he critiques different parts of society and its abuse of wealth and power. In part four the main character‚ Gulliver‚ takes a voyage to the country of the Houyhnhnms where he finds a creature that he believes lives peacefully and without any flaws. It is during this voyage that Swift lays out what he believes to be his “ideal
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million. d. Cash‚ $10 million 3. The cost of debt (using the quoted yields on HydroTech’s outstanding bond issues)‚ which is 7%. With this information in hand‚ you are now prepared to undertake the analysis. Case Questions & Solutions for Case Questions 1 – 5 1. Calculate HydroTech’s net debt. Total Debt = $50 million; Cash = $10 million Net debt = Total debt – cash Net debt = $50 million - $10 million Net debt = $40 million HydroTech’s net debt is $40 million
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Behavioral Finance Behavioral finance attempts to explain what‚ why‚ and how of finance and investing from a human perspective. More specifically‚ behavioral finance integrates psychology and economics into the study of human judgment and biases in decision making under conditions of uncertainty. (David‚ 2004) In order to clearly define and explain the origin of behavioral finance‚ it is important to first define finance‚ which is the foundation of behavioral finance. Finance is a field
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