Valuing options to renew at future market value:the case of commercial property leases

In this study,we develop and empirically test a valuation model for a commonly encountered option in office leases:a tenant’s option to renew at future market rent(a fair market value)with lease termination as the maturity date.The model integrates decision analysis with real options analysis and market risk with private risks.“Option value”is defined as the private value of the option to either party pre-contract,while“option price”assumes a fair agreement between transacting parties and can be positive(rental premium paid)or negative(rental discount offered).Without manifest expectations,an analysis of a sample of office leases supports the model’s logic with price estimates in a practical range.The tenants’option price/value is shown to have a negative relationship with the original/renewal lease term;conversely,the landlords’option value is positively related to the original/renewal term.Comparative analyses show that transaction costs have a positive effect on tenants’option value and on prices,while vacancy costs and the vacancy period are both positively related to the landlords’option value and negatively related to price.Market rent is found to have a negative relationship with option price.Overall,this study provides a theoretical analysis and empirical tests of the value of a real option that allows option holders to renew/extend their contracts at a fair market value.

Assessment of Direct Eco-value of Liangzi Lake

[Obective] This study amied to evaluate the direct usage value of Liangzi Lake, like plants and animal resources and water storage value. [Method] It was measured through the market value method. The physical environment was introduced and the productivity of the lake was investigated both through the literature materials and the investigations. The market value method was clarified in this paper as well as its operation process and the application fields. [Result] Based on the introduction of the current situation in Liangzi Lake, the direct usage value was estimated as 1.32 billion Yuan/year. Plant resources value was 318 million Yuan/year; animal resources value was 675 million Yuan/year; and water storage value was 325 million Yuan/year for the three parts. [Conclusion] This paper will attract more attention to the emphasis of the reasonable development of nature sources.

Does the EVA valuation model explain the market value of equity better under changing required return than constant required return?

Through the Economic-Value-Added(EVA)valuation model,the expected market value of equity can be determined by adding the book value of equity with the present value of expected EVAs under the assumption of constant required return and constant return on equity.The equation of EVA valuation model has taken its shape under the assumption of constant required return and constant return on equity.However,a large body of empirical evidence indicates that required rate of return never remain constant.The EVA-valuation model formulated under constant required return cannot be implemented under the scenario of changing required return.In this study,we explored whether the EVA valuation model could be implemented under changing required return by making any changes in the model and found that it could be implemented under the scenario of changing required return by replacing the book value of the equity of the existing model with the present value of required earnings or normal market earnings.We further examined whether the explanatory ability of the EVA valuation model under the assumption of changing required return is better than that of the valuation model under the assumption of constant required return.Relative information content analyses were conducted by considering sample of the intrinsic value of equities determined by valuation models and the market value of equities of 69 large-cap,88 mid-cap,and 79 small-cap companies.The results showed that the EVA-based valuation model with changing normal market return outperformed the EVA-based valuation model with constant required return.

Importance of Synergistic Value in the Context of Business Combination： A Case Study From Turkey

Considering International Financial Reporting Standards （henceforth IFRS）, although fair value is suggested in the conceptual framework and related standards, concept of measurement is used instead of concept of valuation. Determining the fair value of the acquiree specific into business combination, is needed to identify the fair value of the valuation made beyond the measurement of either monetary items or non-monetary items in the financial statements. Essential reason of the difference between acquired entity＇s fair values as a basis of financial reporting standards and valuation standards, the fair value according to IFRS is equivalent to the market value according to International Valuation Standards （henceforth IVS）. The fair value in accordance with IVS, the combination of the market value, and the synergistic value of the asset are subject to valuation in terms of special purchaser. When business is concerned, considering parameters such as the position in the industry, brand awareness, intellectual capital, geography, cannot be expected to be equal to the fair value of business which simply consists of market value among market participants. The ultimate aim of the study is to illustrate how to determine synergistic value in the terms oflVS which shows the difference between the market value and fair value. Based on the findings of the study, if acquired assets and liabilities are recognized in accordance with IFRS, goodwill comes out during the acquisition. Though, when fair value is determined based on IVS, goodwill is not found, even profitable business combination is realized. This is the result of considered fair value based on IVS Framework, that is the combination of market value of an asset in question and total synergistic value.

Market value management＇s effects on listed companies

The reformation of equity-split on April 29th, 2005, has promoted market value management and created the necessary conditions for market value management. With the purpose of stabilizing and enhancing corporate market value and realizing stockholders＇ wealth maximization, the market value management becomes especially important for all listed companies. This paper begins with the general introduction of market value management including its definition, contents and performance evaluation systems, appraises the best 10 market value management listed companies during 2007-2008. Then analyzes the benefits of the market value management on the Guizhou Maotai which has gained great achievements on market value management, and finally draw conclusions about market value management＇s general effects on listed companies.

Italian Banking Sector and Value Creation

The finn value is the fundamental topic of corporate finance. The value creation is the aim of economic initiatives, strategies, corporate policies, and all business activities, including banking. It depends, among other things, on size, legal form, and business model. Therefore, this paper wants to demonstrate and explain the differences about the value created in the Italian banking sector, where there is much diversity regarding size, legal form, and business model. This paper estimated and compared the value of Italian listed companies from 2010 to 2012 and found the result： Banks create more value if they are big and operate in investment banking. Furthermore, it proved that legal form hasn＇t influenced performance and value of banks.

Agile Opportunities in the Chinese Automobile Market and Marketing Recommendations for Chinese Automakers

This paper is based on a study of the Chinese automobile market and industry and aims at proposing marketing recommendations for Chinese automakers. We approach the problem by putting the customer at the central focal point of all marketing operations. We look for agile opportunities in the Chinese automobile industry and identify customers＇ needs and expectations in the current and future markets and propose solutions to satisfy those needs. We, then, develop a strategic marketing framework based on the 5P marketing model and Blue Ocean Strategy to make best use of the agile opportunities.

Research on the Relationship Between Macroeconomic Indicators and Stock Market Value

The article first addresses the following questions:“Why does gross domestic product(GDP)rises,but the stock market value falls?”;“Among the macroeconomic factors,which factor has a greater impact on the promotion of investment value in the securities market?”.With these questions in mind,we put forward a hypothesis emphasizing on the impact of macroeconomic factors on the value of the stock market based on existing research and used the regression method to verify this hypothesis.The following conclusions were drawn:(1)variables that have a positive nonlinear relationship with stock market value include balance of payments surplus,rising GDP level,M1,the whole society’s fixed asset investment,and national per capita disposable income;(2)variables that have a negative nonlinear relationship with stock market value include deposit,loan interest rate,new RMB loan amount,consumer price index(CPI),and producer price index;(3)deposit reserve ratio has an S-shaped curve relationship with stock market value;(4)exchange rate has an inverted U-shaped curve relationship with stock market value.

Considerations for gluten free foods-pearl and finger millet processing and market demand

The market demand for gluten free foods is increasing due to frequent incidences of celiac disease and increasing awareness on consumption of gluten free foods.Millets have become the major constituent of diet as they are gluten-free and also excellent sources of micro and macro nutrients such as vitamins,minerals,dietary fibers and phenolic compounds.Among various millets,the finger millet and the pearl millet are the two most important and common millet varieties grown extensively.Since,they are regarded as the staple foods of the poor and vulnerable populations,development of new products and improvements in their nutritional quality will aid in the general health of these population.Processing of millets and production of variable gluten-free ready-to-eat and nutritional supplements has increased their market value in the recent years.Furthermore,processing can also help in shelf-life extension of the millets with nutritional enrichment,expanding its markets to non-traditional millet consumers.In this context,the present review is aimed to focus on the current processing methods to develop products from the two millet varieties that are gluten free and outline their nutritional benefits.

The Rise of China’s Women’s Basketball Team:An Exploration of Gender Equality in Professional Basketball

This article explores the rise of the Chinese women’s basketball team in professional basketball and its relationship to gender equality issues.In view of the gender differences in salary,market value,social status,and other aspects,the article proposes a series of strategies to promote the realization of gender equality for female basketball players in professional basketball.This article points out that the rise of the Chinese women’s basketball team will lead the process of gender equality and lay the foundation for a more equitable and inclusive future.To achieve this goal,this article highlights the importance of improving the competitive level of female athletes,improving basic education,promoting basketball culture,and promoting gender equality.

The Capital Market Reaction and the Influencing Mechanism of the Establishment of the Data Basic Institutional System

This study uses a sample of A-share listed companies to investigate the impact of China's Data Basic Institutional System on capital market reactions and the mechanism by which it exerts influence.The findings reveal that within a 5-day period before and after the policy announcement,listed companies with high data resources experience a significantly higher abnormal return compared to those with low data resources.Moreover,this difference becomes more pronounced as enterprise technology intensity increases.Furthermore,the policy enhances the capital market's perception of the value of data resources and its potential for generating multiplier effects.Additional tests confirm that post-implementation of the policy,the capital market reevaluates the long-term value of enterprises associated with data resources.This comprehensive examination contributes empirical evidence to support academic research,inform policy formulation,and guide strategic planning in relevantindustries.

Gauging a Firm's Innovative Performance Using an Integrated Structural Index for Patents

Purpose： In this contribution we try to find new indicators to measure characteristics of a finn＇s patents and their influence on a company＇s profits. Design/methodology/approach： We realize that patentevaluation and influence on a company＇s profits is a complicated issue requiring different perspectives. For this reason we design two types of structural h-indices, derived from the International Patent Classification （IPC）. In a case study we apply not only basic statistics but also a nested case-control methodology. Findings： The resulting indicator values based on a large dataset （19,080 patents in total） from the pharmaceutical industry show that the new structural indices are significantly correlated with a firm＇s profits. Research limitations： The new structural index and the synthetic structural index have just been applied in one case study in the pharmaceutical industry. Practical implications： Our study suggests useful implications for patentometric studies and leads to suggestions for different sized firms to include a healthy research and development （R＆D） policy management. The structural h-index can be used to gauge the profits resulting from the innovative performance of a firm＇s patent portfolio. Originality/value： Traditionally, the breadth and depth of patents of a firm and their citations are considered separately. This approach, however, does not provide an integrated insight in the major characteristics of a firm＇s patents. The Sh（Y） index, proposed in our investigation, can reflect a firm＇s innovation activities, its technological breadth, and its influence in an integrated way.

Existing European Buildings and Cities： Economic Improvement and Evaluation of the Cost-Benefit Related to Lifecycle and Performance

In this study, the interdependency is presented between the characteristics of the buildings and the relative economic value, in order to plan economic policies and preconditions for improving the quality of the European buildings heritage through access, by an holistic approach, to the necessary f＇mancial resources. The economic value of a real estate asset is closely connected to the construction features and their performance over time （lifecycle）. Safer, more comfortable and productive buildings for inhabitants are at the same time more operationally efficient and economically convenient for the owners. Solidity characteristics and static resistance to earthquakes, eco-efficiency and other constructive qualities of the building will provide benefits in the long term, and they are directly related the LCC （life cycle cost） including specific construction and/or maintenance costs. Moreover, these characteristics have an impact on the ＂market value＂ and on the ＂mortgage lending value＂ of properties, as well as on the possibility of financing the purchase through access to more affordable mortgages, and to make really feasible conversions even in the absence of public financial resources. This study introduces a new approach for conversions involving whole buildings or city areas. This research identifies the economic sustainability of a project by combining principles and suitable methodologies, together with performance and other characteristics. These aspects constitute the essential prerequisite for obtaining mortgages from banks and/or financial resources from international investors.

Factors Affecting Swedish Forest Property Prices

Historically the price of a forest estate has, at least in Sweden, been closely related to the financial return from the estate, but this connection no longer seems to be that strong, other factors that previously had limited influence on prices now add to the price. Factors like site productivity and age distribution affect the financial return of a forest estate but is it obvious that these factors still influence prices as they once did? Over the last 20 years, the price of forest estates has increased dramatically. If development of prices has led to a weakened connection between return and price, could this be explained by the fact that previously price affecting factors have less weight when valuing forest estates? The purpose of the study was therefore to investigate how a number of factors influence the forest estate price;including site productivity and age distribution. The results shows that neither site productivity, nor age distribution have a significant impact on the forest estate price. What mainly influence the prices seems to be the standing forest volume on the estate and region. The development of the prices seems not only to have influenced the relationship between the return from the forest and the prices, but also minimized the influence of factors like age distribution and site productivity. This means that estates that are bought within the same region, at the same price per cubic meter, can have considerably different potential to gain financial return.

Research on the World’s Most Valuable Antihypertensive Drugs Based on Patent Analysis

Objective To find out several patented technologies of antihypertensive drugs with the most market value through analysis,and provide a reference for the research and development of enterprises.Methods The most valuable patented technologies of antihypertensive drugs from 2009 to 2019 were analyzed to explore the patent layout and technical characteristics of the main patent applicants,and then the key directions of their research and development were gotten.Results and Conclusion Based on the method of patent analysis,five patents with the most market value are extracted to provide important technical support and market value reference for the research and development of generic drugs or new drugs.

The contribution of fungi to the global economy

Fungi provide ecological and environmental services to humans, as well as health and nutritional benefits, and are vital to numerousindustries. Fermented food and beverage products from fungi are circulating in the market, generating billions of USD.However, the highest potential monetary value of fungi is their role in blue carbon trading because of their ability to sequesterlarge amounts of carbon in the soil. There are no conclusive estimates available on the global monetary value of fungi, primarilybecause there are limited data for extrapolation. This study outlines the contribution of fungi to the global economy and providesa first attempt at quantifying the global monetary value of fungi. Our estimate of USD 54.57 trillion provides a starting point thatcan be analysed and improved, highlighting the significance of fungi and providing an appreciation of their value. This paperidentifies the different economically valuable products and services provided by fungi. By giving a monetary value to all importantfungal products, services, and industrial applications underscores their significance in biodiversity and conservation. Furthermore,if the value of fungi is well established, they will be considered in future policies for effective ecosystem management.