Is shareholder interest in corporate social responsibility driven by pecuniary motives (abnormal rates of return) or non-pecuniary ones (willingness to sacrifice returns to address various firm externalities)? To answer this question, we categorize the literature into seven tests: (1) costs of...

The aim of the article is to present the method of establishing equity shares in weight average cost of capital (WACC), in which the value of loan capital results from the fixed assumptions accepted in the financial plan (for example a schedule of loan repayment) and own equity is evaluated by...

Commercial real estate makes up a relatively small percentage of most institutional portfolios, even though the existing literature has consistently reported attractive risk-return characteristics that would suggest much larger allocations. The discrepancy has been explained by a perceived lack...

We empirically examine the crucial relevance of financing variables in driving the long-lived capital spending by Tunisian firms. The theoretical underpinnings of external finance models encompass credit frictions and show that liquidity constraints highly drive the firm dynamics. We group the...

This paper examines alternative accrual accounting rules from an incentive and control perspective. For a range of common production, financing and investment decisions we consider alternative asset valuation rules. The criterion for distinguishing among these rules is that the corresponding...

Set in June 2001, the case places the student in the role of Scott Topping, Director of Corporate Finance at Southwest Airlines. Scott is responsible for the airline's fuel hedging program. The case describes the importance of jet fuel hedging in the airline industry, the volatility of jet fuel...

Our study of 267 U.S. firms shows that improved environmental risk management is associated with a lower cost of capital. Our findings provide an alternative perspective on the environmental - economic performance relationship, which has been dominated by the view that improvements in economic...

We study how supply risk, fixed supplier costs, financial constraints, and the dual role played by the suppliers as the providers of parts and the financiers of the manufacturer affect the relationship among firms in a supply chain, supplier selection, and supply chain performance. Using a...

The case discusses the implementation of economic value added (EVA) financial management system at Godrej Consumer Products Limited (GCPL), a leading FMCG (Fast Moving Consumer Goods) company in India, in 2001. The EVA program consists of three elements: EVA centers (business units), EVA drivers...

We show how infinite horizon stochastic optimal control problems can be solved via studying their finite horizon approximations. This often leads to analytical solutions for the infinite horizon problem, even when the complexity of the finite horizon approximation is to large, as in order to...