The Effect of Managerial Overconfidence on the Values of Equity and Firm: A Simulated Valuation Approach

Kwag, Seung Woog 한국상업교육학회 2020 상업교육연구 Vol.34 No.5

1) 기업은 줄곧 경영진 자기과신의 희생양이 되어 왔다. 미국을 비롯한 대부분의 국가 에서 경영진 자기과신은 기업의사결정의 핵심 요인으로서 각종 투자정보를 분석하고 평가하는 과정에 깊이 관여하며 기업가치 증대 활동을 위축시키는 원인으로 주목받았 다. 특히 인수대상기업의 가치를 평가하는 고난도 과업을 담당하는 경영진들 사이에 서 두드러진다. 본 논문은 경영진 자기과신이 기업가치에 미치는 영향을 가치평가모 형과 민감도 시뮬레이션을 활용하여 고찰한다. 가치평가모형으로는 배당할인모형과 자유현금흐름모형이 사용된다. 시뮬레이션분석 결과는 기업가치가 경영진 자기과신의 변화에 매우 민감하게 반응함을 여실히 보여준다. 배당성장모형을 적용했을 때 자기 과신은 자기자본의 가치를 정상가치보다 평균 약 4.5배 과대평가하는 오류를 유발했 다. 자유현금흐름모형의 경우에는 기업가치가 자기과신으로 인해 정상가치보다 평균 약 9.9배가 치솟았다. 경영진 자기과신이 기업경영에 긍정적으로 작용한다는 연구도 종종 보고되고 있지만 자기과신으로 인한 주식가치나 기업가치의 과대평가를 과소평 가해서는 안 된다. 주식시장의 검증을 거치며 과도한 가치평가의 오류가 수정되면 기 업가치는 큰 폭으로 감소하게 되고 그 피해는 고스란히 주주들의 몫이 되기 때문이 다. 따라서 경영진 자기과신은 기업이나 개인의 투자의사결정 시 적절히 할인되어야 하고 재무관리와 회계 교육 시 가치평가의 필수요인으로 다루어져야 한다. The corporate world has suffered a crisis of managerial overconfidence. In the United States and around the world, managerial overconfidence has been a key input of corporate decisions for decades. Managerial overconfidence affects how managers interpret the information they receive from various media and on- or off-line sources. Managerial overconfidence is particularly pronounced among managers of acquiring companies who face the difficult task of evaluating the takeover targets. The purpose of this article is to investigate the impact of managerial overconfidence on firm value through a valuation framework. To this end, we employ two conventional valuation models – the dividend discount model (DDM) and the free cash flow model (FCFM) - to reveal the valuation effect of managerial overconfidence. Simulated sensitivity analyses show that the propensity of firm value to managerial overconfidence changes rapidly when the degree of managerial overconfidence strengthens. The simulation results show that when the DDM is applied the overconfident value of equity is, on average, 4.5 times the non-overconfident value of equity. When the FCFM is simulated, the ratio of the overconfident value of firm to the non-overconfident value of firm becomes 9.9 times, a big jump from 4.51 times for the DDM case. Regardless of the evidence of its useful contributions, managerial overconfidence appears to be a value-destroying behavioral bias that needs to be properly and cautiously addressed in corporate and individual investments and in educational settings of finance and accounting.

Electrical Insulation Characteristics of a High-<tex> ${\rm T}_{\rm c}$</tex> Superconducting DC Cable

Kwag, D.-S.,Cheon, H.-G.,Choi, J.-H.,Kim, H.-J.,Cho, J.-W.,Kim, S.-H. IEEE 2008 IEEE transactions on applied superconductivity Vol.18 No.2

<P>A high temperature superconducting (HTS) DC cable is ideal for transmitting large amount of electrical power over a long distance. However, it must be designed to operate reliably within the constraints of the electrical systems. Therefore, a study of the electrical insulation is important to develop a HTS DC cable because it is operated in a cryogenic high voltage environment. This paper discusses the dielectric constructions of the cable and summarizes the experiment results on the DC and impulse dielectric characteristics of the insulation material, in sheet form and mini-model cable configuration. This shows how to design such insulation to be operated reliably. These studies are essential for the insulation design of a HTS DC cable operating in cryogenic environment.</P>

Binding of zinc(II) macrocycles toward carboxylate ligands

Kwag, Jin Suk,Kim, Ju Chang,Lough, Alan J.,Lee, Byung Min Springer-Verlag 2010 Transition metal chemistry Vol.35 No.1

Application of Bayesian statistics to seismic probabilistic safety assessment for research reactor

Kwag, Shinyoung,Oh, Jinho,Lee, Jong-Min Elsevier 2018 Nuclear engineering and design Vol.328 No.-

<P><B>Abstract</B></P> <P>Nuclear facilities are susceptible to the damage due to earthquake hazards. The recent strong earthquake events show the need to explore scenarios in which the expected seismic hazard exceeds a design basis earthquake. In this regard, the seismic probabilistic safety assessment (SPSA) methodology has been developed and utilized to access the overall risk to a nuclear power plant. However, it remains challenging to deal with various uncertainties, accurately to describe correlated events, to accommodate newly observed data and to consider severe accident scenarios within the current framework. In order to overcome such challenges and take advantage of the merits of recent systems analysis concepts, this paper explores a SPSA approach by integrating the current SPSA framework with a Bayesian network and Bayesian inference instead of utilizing the standard fault tree-based technique. The proposed approach enables one to account for what are known as Aleatory and Epistemic uncertainties, to consider the correlated events, to incorporate the additional data and to conduct vulnerability assessments in an accident condition. The proposed Bayesian-based method is demonstrated by its application to a research reactor as an example. Several case studies are conducted to demonstrate how additional information such as correlated events and newly observed data changes the system-level fragility and risk. In addition, a critical scenario is investigated in a situation in which an accident has occurred for a vulnerability assessment beyond a design-basis event. Consequently, it is shown that the proposed approach provides an enhanced framework for risk assessments at nuclear facilities under earthquake hazards. This framework is ultimately expected to be extended to effective plans to mitigate system-level risk and to enhance decision support for risk-informed designs.</P> <P><B>Highlights</B></P> <P> <UL> <LI> This study explores a Bayesian-based approach for seismic PSA of research reactor. </LI> <LI> Incorporation of a Bayesian network enables considering correlated events. </LI> <LI> It is also capable of conducting beyond-design-vulnerability assessments. </LI> <LI> Bayesian inference makes it feasible to evaluate real-time risk. </LI> </UL> </P>

Study of activation process and active site of co-based catalyst for 1, 3-butadiene polymerization using X-ray absorption spectroscopy and DFT calculations

Kwag, Gwanghoon,Bae, Chulbeom,Kim, Sunghyun Wiley Subscription Services, Inc., A Wiley Company 2009 Journal of applied polymer science Vol.113 No.4

<P>Activation process and active site of Co-based Ziegler-Natta catalysts were studied by using synchrotron X-ray absorption spectroscopic technique and an optimum model of the cobalt active site was proposed with density functional theory (DFT) calculations. In the X-ray absorption near edge structure (XANES) spectrum of Co(2-ethylhexanoate)<SUB>2</SUB>, the preedge peak, 1s → 3d transition at 7707.8 eV and the K-edge peak, 1s → 4p transition at 7719.2 eV were observed. Both the intense K-edge and the weak preedge peaks indicate that Co(2-ethylhexanoate)<SUB>2</SUB> possesses high O<SUB>h</SUB> symmetry and the cobalt exists in a divalent state. Upon addition of methylaluminoxane (MAO), some changes in peak positions and intensities were observed. The preedge peak was a little shifted to 7708.2 eV with increased intensity, and the K-edge peak was shifted to a lower energy, 7717.2 eV with decreased intensity. This indicates that the oxidation state of cobalt still mainly remained +2 and the coordination geometry was altered from O<SUB>h</SUB> to T<SUB>d</SUB> resulting from Co 3d and 4p orbital mixing with a loss of O<SUB>h</SUB> symmetry. In the XANES spectrum of a mixture of Co(2-ethylhexanoate)<SUB>2</SUB>, MAO and t-BuCl, the K-edge peak at 7715.7 eV was observed. The orbital mixing of 4p cobalt and 2p chlorine orbitals results in a low energy transition. In 1,3-butadiene polymerization, this is attributable to the coordination of chlorine to cobalt, which is believed to facilitate cis-configuration and increasing reactivity. B(C<SUB>6</SUB>F<SUB>5</SUB>)<SUB>3</SUB> was employed as Lewis acid, but no significant interaction with cobalt was found in the XANES spectrum of a mixture of Co(2-ethylhexanoate)<SUB>2</SUB>, Al(iBu)<SUB>3<SUP>,</SUP></SUB> and B(C<SUB>6</SUB>F<SUB>5</SUB>)<SUB>3</SUB>, which is similar to the XANES of a mixture of Co(2-ethylhexanoate)<SUB>2</SUB> and Al(iBu)<SUB>3</SUB>. B(C<SUB>6</SUB>F<SUB>5</SUB>)<SUB>3</SUB> as Lewis acid does not greatly disturb the coordination symmetry of cobalt nor influence the oxidation state. © 2009 Wiley Periodicals, Inc. J Appl Polym Sci, 2009</P>

High performance elastomer composites containing ultra high cis polybutadiene with high abrasion and low rolling resistances

Kwag, Gwanghoon,Kim, Pillsung,Han, Shin,Lee, Seunghwon,Choi, Hyungkyu,Kim, Sunghyun Wiley Subscription Services, Inc., A Wiley Company 2007 Journal of applied polymer science Vol.105 No.2

<P>A series of rubber composites with ultra high cis polybutadiene (UBR), NUC1–3, SBC1–4, SUS1–4, was prepared, and their vulcanized properties were measured and analyzed. The ultra high cis polybutadiene was prepared with the monomeric neodymium catalyst, Nd(neodecanoate)<SUB>3</SUB>·(neodecanoic acid). NUC composites were composed of natural rubber, ultra high cis polybutadiene, and carbon black. In the composite of a low carbon black content (NUC1, 45 phr), a high abrasion-resistance and a significantly low rolling resistance (tan δ<SUB>60°C</SUB>, 0.04) were obtained. According to the AFM study of NUC composites, abrasion resistance was closely related with surface morphology. In the SUS composites prepared with SSBR (solution styrene–butadiene copolymer), UBR, and silica, as the content of ultra high cis polybutadiene increased, Δcure torque (M<SUB>H</SUB>–M<SUB>L</SUB>) increased with fast cure kinetics. SUS4 showed high elongation and tensile strength with excellent abrasion resistance. Rolling resistance was improved as the content of ultra high cis polybutadiene increased. The SBC composites were prepared with SBR (emulsion styrene–butadiene copolymer), ultra high cis polybutadiene (or high cis polybutadiene), and carbon black. It is remarked that abrasion resistance and Δtan δ (tan δ <SUB>60°C</SUB> − tan δ<SUB>0°C</SUB>) are increased with ultra high cis polybutadiene. © 2007 Wiley Periodicals, Inc. J Appl Polym Sci 2007</P>

Facile synthesis of partially uncapped liposomes

Kwag, Dong Sup,Park, Kyeongsoon,Youn, Yu Seok,Lee, Eun Seong Elsevier 2015 Colloids and surfaces. B, Biointerfaces Vol.135 No.-

<P><B>Abstract</B></P> <P>Sophisticated control of the assembly of nano-sized structures to achieve desired properties is one of the most efficient techniques in drug carrier design. In this study, we hypothesized that under magnetic shear stress, high-density superparamagnetic Fe<SUB>3</SUB>O<SUB>4</SUB> nanoparticles dispersed in a liposome would apply a high load in a particular direction to a liposome membrane and ultimately generate open lipid bilayer holes. Indeed, the designed experimental conditions enabled the formation of one or multiple open pore sites in liposome membranes. With this evidence, open lipid bilayer holes in liposome membranes were further used as open entrances for proteins (bovine serum albumin or insulin) into the liposomes prior to the natural recovery (<I>i.e.</I>, closing) of the lipid bilayer holes. This trial will provide potential opportunities for the engineering of functional liposomes for protein drug delivery.</P> <P><B>Highlights</B></P> <P> <UL> <LI> We developed a new fabrication method for partially uncapped liposomes using Fe<SUB>3</SUB>O<SUB>4</SUB> nanoparticles. </LI> <LI> Under magnetic shear stress, Fe<SUB>3</SUB>O<SUB>4</SUB> nanoparticles dispersed in a liposome ultimately generated open lipid bilayer holes. </LI> <LI> This method is simple and safe for biomedical and cosmetic application. </LI> </UL> </P>

Electronic property of Group IV phthalocyanine dimers: SiPcMPc

Kwag, G.,Bae, C.,Kim, S.,Lee, J.J.,Kenney, M.E. Elsevier Sequoia [etc.] 2009 Inorganica chimica acta Vol.362 No.6

A series of Group IV phthalocyanine (Pc) dimers, (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOSiPcOSi(n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB> (SiPcSiPc), (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOGePcOSi(n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB> (SiPcGePc), and (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOSnPcOH (SiPcSnPc), was characterized by cyclic voltammetry and DFT calculation. Two oxidations and two reductions were observed for (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOSiPcOSi(n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB> and (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOGePcOSi(n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>, while there were two oxidations and three reductions for (n-C<SUB>6</SUB>H<SUB>13</SUB>)<SUB>3</SUB>SiOSiPcOSnPcOH. The Pc with a bigger size of the central metal in one part of the dimeric compound is more difficult to be oxidized but it is easier to be reduced at the same time: i.e., both oxidation and reduction potentials showed a positive shift with the increase of the size of the central metal atom. Density functional theory was used to optimize the structures of the Pc dimers and to understand the electrochemical properties. The optimized structures of HOSiPcOSiPcOH, HOSiPcOGePcOH and HOSiPcOSnPcOH as model compounds for SiPcSnPc, SiPcGePc, SiPcSiPc, respectively, show that all the Pc dimers are staggered, the plane-to-plane distances are 3.394, 3.538 and 3.722A, respectively. Tin generates a saddle-type structure of phthalocyanine, but silicon or germanium does not greatly distort the ring structure, and yields a planar ring structure. A large plane-to-plane distance and a high degree of plane distortion yield a red-shift of Q-band, a low ring current, high oxidation and low reduction potentials and high ionization energies.

Bayesian-based seismic margin assessment approach: Application to research reactor

Kwag, Shinyoung,Oh, Jinho,Lee, Jong-Min,Ryu, Jeong-Soo Techno-Press 2017 Earthquakes and structures Vol.12 No.6

A seismic margin assessment evaluates how much margin exists for the system under beyond design basis earthquake events. Specifically, the seismic margin for the entire system is evaluated by utilizing a systems analysis based on the sub-system and component seismic fragility data. Each seismic fragility curve is obtained by using empirical, experimental, and/or numerical simulation data. The systems analysis is generally performed by employing a fault tree analysis. However, the current practice has clear limitations in that it cannot deal with the uncertainties of basic components and accommodate the newly observed data. Therefore, in this paper, we present a Bayesian-based seismic margin assessment that is conducted using seismic fragility data and fault tree analysis including Bayesian inference. This proposed approach is first applied to the pooltype nuclear research reactor system for the quantitative evaluation of the seismic margin. The results show that the applied approach can allow updating by considering the newly available data/information at any level of the fault tree, and can identify critical scenarios modified due to new information. Also, given the seismic hazard information, this approach is further extended to the real-time risk evaluation. Thus, the proposed approach can finally be expected to solve the fundamental restrictions of the current method.

Bow Wave Breaking and Viscous Interaction of Stern Wave

Kwag, Seung-Hyun The Korean Society of Mechanical Engineers 2000 JOURNAL OF MECHANICAL SCIENCE AND TECHNOLOGY Vol.14 No.4

The bow wave breaking and the viscous interaction of stern wave are studied by simulating the free-surface flows. The Navier-Stokes equation is solved by a finite difference method in which the body-fitted coordinate system, the wall function and the triple-grid system are invoked. After validation, the calculations are extended to turbulent flows. The wave elevation at the Reynolds number of $10^4$ is much less than that at $10^6$ although the Froude number is the same. The numerical appearance of the sub-breaking waves is qualitatively supported by experimental observation. They are also applied to study the stern flow of S-103 for which extensive experimental data are available. Although the interaction between separation and the stern wave generation are not yet clear, the effects of the bow wave on the development of the boundary layer flows are concluded to be significant.