Technology transfer agreements between universities and industrial companies usually involve royalties, sublicensing considerations and allocation of equity. This article extends the analysis of my previous one ("The Economic Sense of Royalty Rates", ewp-fin/970903)to deal with sublicensing...

Academic institutions, involved in technology transfer to industry, are always concerned about the "fairness" of the royalty rate payable to them. The common method used by practitioners is the "Industry-Standard Approach" which is based mainly on past experience. However such approach is very...

This article investigates which firms borrow directly from the capital markets and which raise funds through intermediaries. Our empirical results show that large companies with abundant cash and collateral tap the credit markets directly. These markets cater to safe and profitable industries,...

In the Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates value in the presence of taxes through the tax shield. In some cases,...

We present a unified analytical theory of production and capital structure of firms. It is extended from an analytical theory of production, whose main result is an analytical formula of variable cost of production as a function of fixed cost and uncertainty. Problems on capital structure can be...

Economists tend to agree that the recent cutting of dividends taxes will encourage investment and reduce financial distress. In addition to creating these “benefits,” however, the tax cut can also increase governance costs. For example, by removing a bias for leveraged capital structures,...

This study analyzes the interaction of agency problems in public policy and of agency problems inside the firm: it investigates the case of a large privatized firm subject to many policy constraints. The last steps of Telefonica's privatization were designed to promote a disperse ownership and...

This paper analyses the evolution of Corporate Governance (CG) mechanisms and organizational changes of the Hellenic Telecommunication Organization (HTO) and has two objectives: to enrich the debate and to contribute to the increasing body of literature by examining and analyzing the...

This paper provides a general framework for pricing of real options in continuous time for wide classes of payoff streams that are functions of Levy processes. As applications, we calculate the option values of multi-stage investment/disinvestment problems (sequences of embedded options, which...

As the valuation of strategic measures becomes increasingly important, relatively few articles have discussed the valuation methods pertained for joint ventures. This paper shows that real options contribute to a better valuation of joint venture projects through superior reflection of the value...