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Abstract - The Impact of Cash Flows and Weighted Average Cost of Capital to Enterprise Value in the Oil and Gas Sector
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Abstract: This paper investigates whether there is relationship between fluctuations of enterprise value or capitalization and related changes of WACC and cash flows. The study carried on the sample of some companies from the oil and gas sector, for the changes at intermediate term - from a quarter to three years. At the first stage the common model of discounting free cash flow on WACC was considered as the base model for research. The main conclusion was - intermediate term changes in the enterprise value are independent from changes of WACC. Dependence from changes in cash flows is either insignificant, except permanent growth rate for some growing companies. Finally it is concluded, that traditional WACC is not relevant discount rate for an assessment of enterprise value. At the second stage the alternative method for assessment of enterprise value was proposed, where cash flow is considered equal to expected value, which may grow with permanent growth rate. The method is based on stochastic cost of capital, similar to the generalized method of moments proposed by J. Cochrane, but different in conduction. Keywords: Enterprise value, capitalization, financial risks, WACC, stochastic discount rates, generalized method of moments. |
Abstract - Optimization of the Formation of the Capital Structure of the Insurance Company, Taking into Account the National Specifics of Insurance
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Abstract: The study proposed an economic model of capital optimization of the insurance company, based on the actuarial method of calculating insurance tariffs. Features of the national insurance system are considered. A mathematical model and actuarial calculation of insurance tariffs for partners in the implementation of joint activities are proposed. As the algorithm implementation calculations were made for the model of joint life insurance of spouses, which has their own practical interest. A lump-sum net rate has been calculated for a contractual partner in the event of the death of one of the partners (spouses) before the retirement age, depending on the interest rate, the age of the spouses, their residual times to pensions, the death rates and the maximum permissible ages. Average time and variance of the Treaty were calculated. It is practically important for the insurance company when planning the investment of assets under the agreement. The results of the research allow us to calculate the insurance tariffs in the form of a lump sum payment to the insured persons and to evaluate the numerical characteristics of the validity period of the contract. Keywords: Insurance rates, life insurance, interest rate, net premium, distribution density, distribution function, economic mathematical model of risk insurance. |
Abstract - Inflation and Cash
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Abstract: Cash demand is investigated by means of mathematical analysis. The optimal cash amount a person needs in order to minimize the effect of inflation and maximize percent money is given here. The corresponding number of cash transfers for a period is calculated. The corresponding formulas are presented and proved. Keywords: Baumol-Tobin formula, cash withdrawal, average cash, cash demand, inflation rate.< |
Abstract - Optimal Taxation and Economic Growth in Tunisia: Short and Long Run Analysis
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Abstract: Tax policy is among the most common and relevant instruments in the toolkit of policy-makers when thinking about promoting growth, yet there is not compelling evidence regarding its effect in Tunisia. Using a variety of approaches, we measure firstly the optimal tax burden rate using Scully’s static model and the quadratic model. For Scully’s static model, gross domestic product is the dependent variable. For the quadratic model, growth rate is a dependent variable explained by tax rate in level and in square. Secondly and according to stationary and cointegration test results, we focus on the long-term effects on gross domestic product of the important taxes, namely tax revenue and private receipts. In this second study, we use a basic Scully model and we develop a vector error correction model technique. Our results show that optimal tax burden rate has to be situated between 12.8% and 19.6% of gross domestic product which is widely lower than the current rates. The long-term analysis estimates an optimal rate of 14% of gross domestic product which can participate to increase economic growth, to stabilize the tax evasion and to encourage investment especially after the Tunisian revolution. Keywords: Tax burden rate, Growth, Cointegration, Vector error correction model. |
