In the latest edition of Principles of Corporate Finance (Brealey, Myers and Allen, 2006) the authors use a finite cash flow example to illustrate the valuation procedure for using the Discounted Cash Flow (DCF) method with the free cash flow (FCF) and the Adjusted Present Value (APV). The two...

This paper combines the contracting incentives and tax incentives streams of literature to test plausible reasons why firms select different accounting measures of performance when determining executive compensation. The two measures of performance examined are financial income after income...

This paper explores the characteristics of the performance measurement system at TNT (UK) Ltd. which facilitate the translation of strategy into action. TNT is a successful and growing service organisation and a market leader in the overnight distribution of parcels within the UK. The...

A firm with two divisions, each run by a risk-averse manager, contracts with the two managers to operate their divisions and possibly engage in interdivisional trade. Each division can increase the total surplus generated through interdivisional trade by making costly relationship-specific...

This paper investigates the use of variance analysis data for performance evaluation if payments are restricted to ordinal incentive schemes. Within a simple agency model assuming the use of a binary compensation scheme based on a rank order tournament, information systems are analysed with...

EVA is a variant of residual income marketed by Stern Stewart amp; Co., a New York consulting firm, with the purpose of promoting value-maximising behaviour in corporate managers. This paper reviews the EVA system in the light of this purpose. First, it outlines the rationale for the use of...

Many companies are undergoing organizational changes encompassing innovative approaches to organizing production processes, restructuring work practices and developing new planning and control mechanisms. This paper explores the role that management accounting played in the development of...

I study the consequences of a random exposure to common risk for the purpose of relative performance evaluation (RPE) and find that it significantly affects the usefulness and the empirical measurement of RPE. According to my analysis, the magnitude of the exposure risk not only determines how...

This study explores the impacts of incentive contracts on the creative process and the resulting creativity of a design job. Using an eye-tracking device to track the designers' eye movements during an artwork design task, we found that designers working under a piece-rate plus competitive bonus...

This paper has an English version and can be downloaded from: "http://ssrn.com/abstract=1799605" http://ssrn.com/abstract=1799605En este trabajo se muestra cómo encontrar la estructura óptima de capital y el valor con un endeudamiento constante y variable período a período, cuando la tasa de...