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Cambridge Centre for Finance (CCFin)

Agency conflicts and costs of equity

The agency problem, in the context of separation in ownership (shareholders or the principals) and control (managers or the agents), is one of the most important issues in corporate finance. This separation may induce conflicts of interest inherent in the…

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What determines cryptocurrency’s expected return?

by Dr Hui (Frank) Xu, Research Associate, Cambridge Centre for Finance and Cambridge Endowment for Research in Finance Dr Hui (Frank) Xu Since the emergence of the cryptocurrencies, they have quickly become the focus of asset managers. Although many ongoing…

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Shadow pills and visible value

Dr Scott B. Guernsey The "poison pill" (formally known as a "shareholder rights plan") has a long and contentious history in the United States as a tactic to deter takeovers.[1] While details can vary across different implementations, the key defensive…

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Keeping secrets from creditors

Dr Scott B. Guernsey As described in the article "The Choice between Formal and Informal Intellectual Property: A Review", published in the Journal of Economic Literature by Bronwyn Hall (University of California, Berkeley), Christian Helmers (Santa Clara University), Mark Rogers…

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Long-term economic outlook and equity prices

by Dr Adelphe Ekponon, Research Associate, Cambridge Centre for Finance and Cambridge Endowment for Research in Finance Dr Adelphe Ekponon The very first asset pricing models (also called Capital Asset Pricing Models or CAPM) have postulated that the only risk…

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Brexit: investor paranoia and the financing cost of firms

Financial markets faced a bumpy ride in 2018. The Financial Times report that global bond and equity markets shrank $5tn last year. Two major risks have been disrupting the markets during the past year: US-China trade dispute and Brexit. The…

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Reinvesting market power for the betterment of shareholders

Dr Scott B. Guernsey On the supply side, highly competitive industries are generally characterised as having many firms and low barriers to entry. The first condition implies that existing firms cannot dictate or influence prices, and the second that new…

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Guaranteed bonuses in high finance: to reward or retain?

by Dr Scott B. Guernsey, Research Associate, Cambridge Centre for Finance and Cambridge Endowment for Research in Finance Public distaste for high finance reached an all-time high in March of 2009, as the American International Group (AIG) insurance corporation announced…

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Is diversification always good?

Probably every Fin 101 class teaches the principle of diversification: do not put all your eggs in one basket. Diversification allows investors to earn the same return but with possible lower risk. Theoretically, any rational investor would pursue the maximal…

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Alternative finance (The Cambridge Judge Business Debate podcast series)

We've heard all the buzz phrases, ranging from 'peer-to-peer lending' to 'cryptocurrencies'. But behind the hype, what exactly is alternative finance, and what are the benefits and risk? In this episode, joining podcast series host Michael Kitson, University Senior Lecturer…

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