The mistaken notion that the internal rate of return (IRR) and net present value (NPV) contain reinvestment rate assumptions lingers in teaching materials and corporate practice. The fact is that there are no reinvestment rate assumptions built into, or implicit to, the computation and use of...

We study the impact of 29 management buyouts (MBOs) announced during the years 1981-1989 on the value of the firms outstanding nonconvertible bonds. Using two methodologies-market-adjusted retums and mean-adjusted returns we provide evidence confirming the presence of significant bondholder...

The incentive for a firm to engage in planning (prearranging) for its future financing derives from the interaction of uncertainty concerning the amount and timing of future needs and the cost of negotiating and terminating contracts in capital markets. Three conditions on relative costs and...

Why do some firms create extraordinary value for shareholders, while others destroy it? A powerful suite of value based management tools can make the difference. Value based management (VBM) refers to tools that financial managers can use to plan, monitor, and control a firm's operations in ways...