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NEWSLETTER of May 27, 2022


The following content has been added at finexpert:


Studies > Corporate Finance

PwC
PORTFOLIO MANAGEMENT STUDIE 2022
New regulation, changing consumer preferences, environmental risks, technological innovations - the manifestations of the so-called VUCA factors (volatility, uncertainty, complexity and ambiguity) are manifold. Russia's attack on Ukraine was added as a further factor and has a variety of effects on market structures. How do corporate executives deal with such uncertainty factors? What strategies do they rely on to best navigate their corporate portfolios through turbulent times - and how successful are they in doing so? >more

Studies > Corporate Finance

Seeking Alpha | Aswath Damodaran
ELON'S TWITTER PLAY: VALUATION AND CORPORATE GOVERNANCE CONSEQUENCES
As Twitter user base and influence have grown, there has been one area where it has conspicuously failed, and that is on business metrics. It is ironic that the threat to Twitter has come from Elon Musk, who has arguably used its platform to greater effect than perhaps anyone else on it. If you think Jack Dorsey was stretching the limits of his time by running two companies, I am not sure how to characterize what Musk will be doing. >more

Studies > Corporate Finance

Deloitte
DISTRESSED M&A-STUDIE 2022
This year's distressed M&A survey is characterized by an environment of increased uncertainty regarding supply chains, inflation/interest rates and further geopolitical risks. Stock prices were near their record highs before Christmas 2021 and have fallen more than 10 percent this year for major indices (DAX 40, S&P 500, Nikkei 225, Hang Seng) since the start of the war in Ukraine. Economists believe that the war in Ukraine could have far-reaching economic effects for Germany. >more

Studies > Macro

KfW Research
ENERGIEKOSTEN IM MITTELSTAND STEIGEN: UNTERNEHMEN GEBEN PREISERHÖHUNGEN WEITER UND ERGREIFEN MAßNAHMEN ZUR ENERGIEEINSPARUNG
The consequences of the war in Ukraine are already being felt by SMEs: In January-April 2022, energy costs were higher at 54% of companies than in the corresponding period of the previous year. On average, energy costs have risen by 41%. Nevertheless, the majority of companies see themselves in a position to financially shoulder higher energy costs at the current level, even in the longer term. The decisive factor here is that energy costs often account for only a small proportion of total costs. >more


Research Papers > Risk Management

CYBERSECURITY RISK
Chris Florackis, Christodoulos Louca, Roni Michaely, and Michael Weber
2022
Using textual analysis and comparing cybersecurity-risk disclosures of firms that were hacked to others that were not, we propose a novel firm-level measure of cybersecurity risk for all US-listed firms. We then examine whether cybersecurity risk is priced in the cross-section of stock returns. Portfolios of firms with high exposure to cybersecurity risk outperform other firms, on average, by up to 8.3% per year. At the same time, high-exposure firms perform poorly in periods of high cybersecurity risk. Reassuringly, the measure is higher in information-technology industries, correlates with characteristics linked to firms hit by cyberattacks, and predicts future cyberattacks. >more

Research Papers > Corporate Finance

AGGREGATE CONFUSION: THE DIVERGENCE OF ESG RATING
Florian Berg, Julian F Kölbel, and Roberto Rigobon
2022
This paper investigates the divergence of environmental, social, and governance (ESG) ratings based on data from six prominent ESG rating agencies: KLD, Sustainalytics, Moody’s ESG (Vigeo-Eiris), S&P Global (RobecoSAM), Refinitiv (Asset4), and MSCI. We document the rating divergence and map the different methodologies onto a common taxonomy of categories. Using this taxonomy, we decompose the divergence into contributions of scope, measurement, and weight. Measurement contributes 56% of the divergence, scope 38%, and weight 6%. Further analyzing the reasons for measurement divergence, we detect a rater effect where a rater’s overall view of a firm influences the measurement of specific categories. The results call for greater attention to how the data underlying ESG ratings are generated. >more

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