Journal of Hospitality Financial Management: Volume 20, Issue 1
Loading...
Volume
Number
Issue Date
Journal Title
Journal ISSN
Journal Volume
Articles
2012 – A Performance Review for Restaurant Firms
(2012-10-01) Sheel, Atul
Returns to Hospitality Acquisitions by Method of Payment
(2012-01-01) Chatfield, Hyun Kyung; Chatfield, Robert; Dalbor, Michael
This is the first study to consider the impact of payment method on announcement period returns in response to a merger and acquisition in the hospitality industry. Much research has been published on the returns to mergers and acquisitions generally and in the last ten years quite a bit has been published on this topic in hospitality journals. But very little has been published about the impact of payment method in hospitality mergers and acquisitions. This paper uses standard event study methodology to determine abnormal returns for a sample of 282 bidding hospitality firms. The results are that an acquisition in the hospitality industry is more likely to be profitable if payment is made with cash. This provides empirical support for the asymmetric information and signaling theories premise that bidding firms will earn positive abnormal returns for cash offers, but returns are not significantly different than zero for stock offers.
Why Do Restaurant Firms Initiate Dividends?
(2012-08-15) Oak, Seonghee; Hua, Nan; Dalbor, Michael
The U.S .restaurant industry has experienced significant growth since 1970 (National Restaurant Association, 2011). Publicly traded restaurant firms tend to initiate dividends soon after they go public, quite often even in the same year. This study tests hypotheses based upon four dividend initiation theories: signaling, life-cycle, agency costs and catering. The results reveal that only the signaling theory is significant. Since most restaurant firms initiate dividends at the growth stage, they tend to have little free cash, flow, high investment opportunities, and low dividend premiums (which are less favorable to investors).
Estimating Cost of Equity in the Restaurant Industry: What is Your Required Rate of Return?
(2012-09-01) Madanoglu, Melih; Kizildag, Murat; Karadag, Ersem
Accurate estimation of cost of equity is critical when making capital investment decisions to allocate valuable corporate resources. While the importance of proper estimation of required rate of return of an investment project is well documented, challenges surrounding estimation of the cost of equity still abound. This paper empirically evaluates the viability of common cost of equity models to estimate required rate of return for the U.S. restaurant industry for the 1996-2010 period. The Full model which consists of five risk factors emerges as the soundest cost of equity model for the U.S. restaurant industry. We recommend that future studies assess the performance of cost of equity models in other countries and other segments of the hospitality industry.
Does Cost Efficiency Lead to Better Financial Performance? A Study on Taiwan International Tourist Hotels
(2012-01-01) Shieh, Hwai-Shuh
The purpose of this study is to conduct an investigation into the link between cost efficiency and financial performance as it pertains to the hotel industry. This study employs DEA approach to estimate cost efficiency and uses three traditional financial indicators, such as the ratio of net operating profit before taxes, the ratio of earnings before taxes, and return on assets before taxes, to measure financial performance. Data were generated from 68 hotels in the international tourist hotels in Taiwan from 1997 to 2006. The major finding indicates that cost efficiency is insignificantly associated with the financial performance, whatever three above financial performance variables. The implications of the findings are discussed and the limitations of the study as well as future research directions are addressed.