26 L.Pinkowitz,R.Stulz,andR.Williamson,“DoFirmsin
CountrieswithPoorProtectionofInvestorRightsHoldMore
Cash?, working paper, SSRN, 2003.
27 B. Schwetzler and C. Reimund, “Valuation Effects of
Corporate Cash Holdings: Evidencefrom Germany,” HHL
Working Paper, SSRN, 2004.
28 M.FaulkenderandR.Wang,“CorporateFinancialPolicy
and the Value of Cash,” working paper, SSRN, 2004.
29 OneofMicrosoft’soddest investmentswasin oneofits
primary competitors, Apple Computer, early in 1998. The
investmentmayhavebeenintendedtofighttheantitrustsuit
brought against Microsoft by the Justice Department.
30 The expected returncan be obtained on a risk-adjusted
basis byusing thebetafor thestocksin the fundand the
overallmarketreturnsintheAsianequitymarketsinwhich
thefundinvests. Asimpler techniquewouldbe touse the
overallmarketreturnastheexpectedreturn,thusmakingthe
implied assumption that the fund invests in average-risk
stocks in these markets.
31 Firms haveevadedthe requirementsofconsolidation by
keeping their share of ownership in other firms below 50
percent.
32 Consolidation in the United States requires that you
consider 100 percentofthesubsidiary,evenifyouownless.
There are othermarkets in theworld where consolidation
requiresonlythatyouconsidertheportionofthefirmthat
you own. This is called proportional consolidation.