Fundamentalmente as empresas necessitam de recursos de capital para financiar, por um lado, a sua estrutura, e por outro a sua actividade.O financiamento da actividade será a necessidade de fundo de maneio, ou seja, o valor monetário necessário para financiar o ciclo de negócio. Este valor...

Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why capital stocks of MSEs remain low. This article analyzes the determinants of capital stocks of MSEs in poor economies...

We develop a model in which investment risk drives the demand for CDS insurance. The model shows the efficiency of CDS contracting over the state of the economy. It shows that CDS overinsurance (insurance in excess of renegotiation surpluses) is procyclical, allowing for greater financing when...

Guarantee banks backed by the state aim to close the gap in the financing of small and medium-sized enterprises or start-ups caused by lacking collateral or equity and high information asymmetry. The present study quantifies the economic and fiscal net benefits of guarantee banks in the new...

This paper focuses on inconsistencies arising from the use of NPV and CAPM for capital budgeting. It shows that (i) CAPM capital budgeting decision-making based on disequilibrium NPV is deductively inferred by the Capital Asset Pricing Model, (ii) the use of the disequilibrium NPV is widespread...

Given the global financial crisis and, particularly, the European sovereign-debt crisis, European countries have the urgent need to promote output growth. However, due to the current financial constraints, it is difficult for the Governments to stimulate economic growth by directly increasing...

Market effects on corporate investment are well documented. Low disagreement implies high investment, but we know little about what high disagreement implies, other than the implied flip side (low investment). This paper adds to this literature in several ways. A new dimension of corporate...

In this paper we analyze the results from a survey among all publicly listed Nordic firms on their dividend payout policy. The results show that 72% of the Nordic companies have a specified dividend policy. Larger and more profitable companies are more likely to have a defined dividend policy in...

This paper presents a new way of measuring residual income, originally introduced by Magni (2000a, 2000b, 2003). Contrary to the standard residual income, the capital charge is equal to the capital lost by investors. The lost capital may be viewed as (a) the foregone capital, (b) the capital...

Residual income as commonly described in academic papers and in real-life applications may be formally described as a function of three variables: (i) the capital invested, (ii) the rate of return, (iii) the opportunity cost of capital. This paper shows that a different paradigm of residual...