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Behavioral Corporate Finance provides new and testable explanations for long-standing corporate-finance puzzles by applying insights from psychology to the behavior of investors, managers, and third parties (e. g., analysts or bankers). This chapter gives an overview of the three leading streams...
Persistent link: https://www.econbiz.de/10012909497
A model of corporate financial policy (debt-equity ratios and dividend payout rates) is included in the Harberger general equilibrium model of incidence of the corporate income tax. Illustrative calculations of the distortions of financial policy and increases in risk premiums induced by the...
Persistent link: https://www.econbiz.de/10013244395
We review the literature on return and cash flow growth predictability form the perspective of the present-value identity. We focus predominantly on recent work. Our emphasis is on U.S. aggregate stock return predictability, but we also discuss evidence from other asset classes and countries
Persistent link: https://www.econbiz.de/10013134792
This paper reviews the theory and evidence regarding the impact of taxation on corporate financial policy. Starting …
Persistent link: https://www.econbiz.de/10013105793
The nature of the firm and its financing are closely interlinked. To produce significant net present value, an entrepreneur has to transform her enterprise into one that is differentiated from the ordinary. To achieve the control that will allow her to execute this strategy, she needs to have...
Persistent link: https://www.econbiz.de/10013066800
How tax reform affects corporate financial decisions helps determine whether reform will increase capital formation and simplify the tax system. This paper describes the effects of fundamental tax reform on corporate tax planning and summarizes economists' knowledge of the magnitude of these...
Persistent link: https://www.econbiz.de/10013249358
The cost of capital plays an important role in the allocation of resources among competing uses in a decentralized market system. The purpose of this paper is to organize and present what is known and what is hypothesized about the effects of taxation on the incentive to invest, via the cost of...
Persistent link: https://www.econbiz.de/10013232028
An increasing fraction of firms worldwide operate in multiple countries. We study the costs and benefits of being multinational in firms' corporate financial decisions and survey the related academic evidence. We document that, among U.S. publicly traded firms, the prevalence of multinationals...
Persistent link: https://www.econbiz.de/10012841414
develop such a framework using existing corporate finance theory and some extensions thereof. This theory is then used to …
Persistent link: https://www.econbiz.de/10012762906
This paper develops a simple model of corporate financial structure intended to formalize the macroeconomic concern over excessive leverage. In particular, we attempt to rationalize why firms designing an optimal capital structure would choose a level of debt that leaves them heavily exposed to...
Persistent link: https://www.econbiz.de/10012763391