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S ensitivity A nalysis A nd S chemes O f A rrangement
Author(s) -
Dean Graeme,
Johnstone David,
Maniatis Harry
Publication year - 1992
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1992.tb00128.x
Subject(s) - sensitivity (control systems) , documentation , computer science , real estate , estate , business , actuarial science , operations research , finance , mathematics , engineering , operating system , electronic engineering
Formal mathematical techniques are being used increasingly as aids to commercial decision‐making. We propose that those deciding whether to liquidate or trade‐out should, as a matter of course, have sufficient information to enable sensitivity analysis on any forecast returns. Sensitivity analyses are notably lacking in documentation used for predicting the outcomes of schemes of arrangement such as the complex Estate Mortgage Trusts (EMT) moratorium on the withdrawal of funds by unitholders. This article details the outcomes of some schemes of arrangement in Australia in the 1960s and 1970s and discusses the EMT moratorium. The moratorium procedures provide the setting and data for simulations and sensitivity analyses. Coupled with the evidence provided by Dean (1977, 1983) and Aitken (1981), this suggests a need for information on the expected timing of payouts to enable sensitivity analysis whenever a scheme involves delayed distributions.