Value based performance measures are intended to capture increases in shareholder wealth. At the same time they have to measure the realization of the returns initially planned for. To provide incentives for management to act in the interest of owners, bonus payments are often based on these...

The paper discusses common mistakes made by financial profession when valuating cash flows by applying inconsistent weighted average discount rates to cash flows to equity, to unlevered firm, to levered firm or other complex cash flows not regarding their type (constant or growing perpetuities,...

The English version of this article is available at: "http://ssrn.com/abstract=2214674" http://ssrn.com/abstract=2214674.En estas diapositivas se discute la dificultad práctica y conceptual de la búsqueda de una estructura óptima de capital EOC. Se propone un enfoque normativo que llamamos...

La versión española de este artículo se puede encontrar en: "http://ssrn.com/abstract=2214703" http://ssrn.com/abstract=2214703.In these slides we discuss the practical and conceptual difficulty of finding an Optimal Capital Structure. We propose a normative approach we call Implicit...

This case provides students the opportunity to practice variance analysis for an annual operating plan using flexible budgeting skills. First, a static budget is flexed to account for changes in product volume. Then, actual results are compared to the flexed budget and analyzed for product...

There is an ongoing dispute about the assumption of reinvesting intermediate cash flows at cost of capital in calculation of NPV and at IRR in calculation of implied yield to maturity. The lack of conclusive evidence lends support to confusion around the issue. This paper provides logical and...

We experimentally examine how employees' employment horizons (long or short) and the performance measures in their incentive contracts (forward-looking or contemporaneous) affect employee effort allocation and performance. Consistent with economic theory, we find that the decision-influencing...

Research in budgeting suggests that subordinates may exhibit economically significant degrees of honesty, in spite of pecuniary incentives to do otherwise. This study continues the exploration of honesty in budgeting along two dimensions. First, unlike prior experiments, we measure the...

On the borderline of management control (MC) and human resource management (HRM) systems, this article investigates the question of performance evaluation criteria, where both systems overlap. The perspective is interpretative, with a focus on the individual perceptions of evaluated persons. The...