Partial
insolvency in leasing contracts may entail affording additional costs. In this
paper, we focus on the case that the lessee makes partial payments in due time
and settles the debt increased by the late payment interests later. The
presence of the extra-costs drives the lease Effective Annual interest Rate
(EAR) to deviate from the lease contract rate. This work aims to illustrate how
design the contract payback amortization to stick EAR to the lease contract
rate, when the lease contract rate, the late payment rate, and the contract
terms are exogenously fixed. First, we achieve a proxy for EAR given by the lease
contract rate plus an extra-charge rate addendum. We show that this last
addendum is sensitive to the payback Modified Duration, a weighted size, and
timing average. Specifically, the longer the Modified Duration, the smaller the
extra-charge rate addendum. As a consequence, two general rules to drive EAR
close to the lease contract rate to roll out, specifically: (1) the payment
pattern should be set with a long Modified Duration; and (2) the surrender
value of the leased good should be put large. As the contract settlement is
given, we identify a lower bound and an upper bound for EAR. The results of the
paper are useful to provide policymakers a better knowledge about the effects
on EAR of the contract conditions on the pattern of payments.
Author(s) Details
Luciano Quattrocchio
Department of Management, School of Management and Economics, University of
Torino, Torino, Italy.
Luisa Tibiletti
Department of Management, School of Management and Economics, University of
Torino, Torino, Italy.
Mariacristina Uberti
Department of Management, School of Management and Economics, University of
Torino, Torino, Italy
View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/199
Construction
material industry is one of the most rapidly growing sectors, with many
achievements both in Vietnam and in Asia. In recent years, its rapid growth has
produced revenues from business activities. One of the key objectives of this
paper is to assess market risk volatility in construction material businesses
in the 2012-2014 pre-low inflation period. Our first findings are to be found
that beta values in general (< 1) for most of our construction material
companies are appropriate when we apply quantitative, statistical and
analytical methods to evaluate the asset beta and beta CAPM of 20 listed Viet
Nam construction material companies. However, we analyze the market risk
volatility, determined by asset and equity beta var, during the post-low inflation period in this
sector and compare results in two circumstances: risk fluctuation in pre-low
inflation time 2012-14 is lower than that in post-low inflation period
2015-2017. Finally, if we observe in 2 periods, Beta CAPM or equity beta mean
goes up in case post-low inflation period.
At last, policies in risk management and governance are suggested in the
conclusion based on the research results and findings. In the post-low
inflation environment, we alert that Beta fluctuations could be little higher.
Author(s) Details
Dinh Tran Ngoc Huy
Banking University Ho Chi Minh City, Vietnam and Graduate School of
International Management, International University of Japan, Niigata, Japan.
Pham Tun Anh
Thuongmai University, Ha Noi, Vietnam.
View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/191
The
Vietnam economy has obtained lots of achievements after the financial crisis
2007-2011, until it reached a low inflation rate of 0.6% in 2015. Vietnam Water
& Electric power Company group are growing and contributing much to the
economic development and has been affected by inflation. High and increasing
inflation might reduce values of Water& Electric power Company group
contracts. This paper measures the volatility of market risk in Viet Nam
Water& Electric power Company group after this period (2015-2017) and
recommends policies for sutainable water treatment and development. The main
reason is the necessary role of the of Water& Electric power Company group
system in Vietnam in the economic development and growth in recent years always
go with risk potential and risk control policies. Hence, this research paper aims to figure out
how much increase or decrease in the market risk of Vietnam Water& Electric
power Company group firms during the post-low inflation environment 20152017.
First, by using quantitative combined with comparative data analysis method, we
find out the risk level measured by equity beta mean in the water and electric
power industry is acceptable, as it is lower than (<) 1. Then, one of its
major findings is the comparison between risk level of stock investment
industry compared to those of Water Company group in the post-low inflation
time 2015-2017. In fact, the research findings show us market risk level of
water and electric power group during the post-low inflation time is lower
(equity beta mean = 0.412). Then, another major finding is the comparison
between risk level of electric power industry in the post-low inflation time
2015-2017 compared to those in the crisis 2007-09. In fact, the research
findings show us market risk level of electric power group during the post-low
inflation time is higher. Finally, this paper provides some ideas that could
provide companies and government more evidence in establishing their policies
in governance. This is the complex task but the research results shows us
warning that the market risk need to be controlled better during the post-low
inflation period 20152017. And our conclusion part will recommends some
policies and plans to deal with it. Basically, we need to have a better
integration management of water cross the country, identify challenges in water
treatment and resolve them.
Author(s) Details
Dinh Tran Ngoc Huy
Banking University, Ho Chi Minh City, Viet Nam and Graduate School of
International Management, International University of Japan, Niigata, Japan.
Nguyen Thi Phuong Thanh
Thai Nguyen University of Information Technology and Communications, Thai
Nguyen, Viet Nam.
Pham Tuan
Anh Thuongmai University, Hanoi, Viet Nam.
View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/185
