Corporate Payout Policy Harry DeAngelo Marshall School of Business University of Southern California hdeangelo@marshall.usc.edu Linda DeAngelo Marshall School of Business University of Southern California ldeangelo@marshall.usc.edu Douglas J. Skinner University of Chicago Booth School of Business dskinner@chicagobooth.edu May 2009 Abstract We present a synthesis of academic research on corporate payout policy grounded in the pioneering contributions of Lintner (1956) and Miller
Premium Dividend
Capital Structure Stewart C. Myers The Journal of Economic Perspectives‚ Vol. 15‚ No. 2. (Spring‚ 2001)‚ pp. 81-102. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28200121%2915%3A2%3C81%3ACS%3E2.0.CO%3B2-D The Journal of Economic Perspectives is currently published by American Economic Association. Your use of the JSTOR archive indicates your acceptance of JSTOR ’s Terms and Conditions of Use‚ available at http://www.jstor.org/about/terms.html. JSTOR ’s Terms and Conditions of Use
Premium Corporate finance Finance Stock market
Capital Structure Theories Capital Structure Capital Structure is the proportion of debt‚ preference and equity capitals in the total financing of the firm’s assets. The main objective of financial management is to maximize the value of the equity shares of the firm. Given this objective‚ the firm has to choose that financing mix/capital structure that results in maximizing the wealth of the equity shareholders. Such a capital structure is called as the optimum capital structure. At the optimum
Premium Finance Weighted average cost of capital Generally Accepted Accounting Principles
you would read the topic theories of capital structure. Here‚ I have made these theories simplified. I hope‚ you can study these theories here and use these theories as reference. We all know that capital structure is combination of sources of funds in which we can include two main sources’ proportion. One is share capital and other is Debt. All four theories are just explaining the effect of changing the proportion of these sources on the overall cost of capital and total value of firm. If I have
Premium Finance Weighted average cost of capital Stock
INDIAN INSTITUTE OF MANAGEMENT‚ INDORE Finance 2 Case Analysis Gainesboro Machine Tool Corporation Course Instructor: Prof A Kanagraj Submitted By: Amol Vyawahare Roll Number: 2008PGP021B Gainesboro Machine Tool Corporation Background Reading: Once a company makes a profit‚ they must decide on what to do with those profits. They could continue to retain the profits within the company‚ or they could pay out the profits to the owners of the firm in the form of dividends. Once the
Premium Dividend Dividend yield Stock
Chapter 12 Capital Structure and Leverage LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain why capital structure policy involves a trade-off between risk and return‚ and list the four primary factors that influence capital structure decisions. • Distinguish between a firm’s business risk and its financial risk. • Explain how operating leverage contributes to a firm’s business risk and conduct a breakeven analysis‚ complete with
Premium Capital structure Weighted average cost of capital Debt
major theories on capital structure: By way of a conventional start‚ perhaps it would be worth our while to look at what "capital structure" actually means. In broad terms‚ it is essentially the firms ’ mix of debt and equity but it would be wrong to assume that this is all there is to it. These two terms belie the complexity that lies beneath‚ from the viewpoint of the decisions that any firm must take - that is to say‚ what kind of debt and which type of equity. Capital structuring would then
Premium Finance Operational risk
Theory of Capital Structure - A Review Stein Frydenberg£ April 29‚ 2004 ABSTRACT This paper is a review of the central theoretical literature. The most important arguments for what could determine capital structure is the pecking order theory and the static trade off theory. These two theories are reviewed‚ but neither of them provides a complete description of the situation and why some firms prefer equity and others debt under different circumstances. The paper is ended by a summary where the
Premium Corporate finance Capital structure Finance
experience and it insisted on the freedom and the autonomy of the individual” (Wolf). The philosophy of existentialism‚ and one of its greatest philosophers Jean Paul Sartre‚ were the motivation and inspiration to the arts and humanities during the 1940’s and 1950’s. First allow me to elaborate on the definition of existentialism and France at the start of 1940. Existentialism is a philosophical movement oriented toward two major themes‚ the analysis of human existence and the centrality of human choice
Premium Existentialism Jean-Paul Sartre Simone de Beauvoir
OPTIMAL CAPITAL STRUCTURE INTRODUCTION This report tries to visualize “OPTIMAL CAPITAL STRUCTURE” and represent the facts that include features of capital structure‚ determinants of capital structure‚ and patterns of capital structure‚ types and theories of capital structure‚ theory of optimal capital structure‚ risk associated with capital structure‚ external assessment of capital structure and some assumption related to capital structure. BROAD OBJECTIVE • To determine features of capital structure
Premium Finance Corporate finance Capital structure