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The Theory of Corporate Finance
In The Theory of Corporate Finance, Michael J. Brennan has brought together a set of major papers which defines the current status of the theory of corporate finance. This authoritative collection emphasizes recent research, while also including representative classics in the field.
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Critical Acclaim
Contributors
Contents
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In The Theory of Corporate Finance, Michael J. Brennan has brought together a set of major papers which defines the current status of the theory of corporate finance. This authoritative collection emphasizes recent research, while also including representative classics in the field.
The main paradigms in corporate finance are addressed in these volumes, with particular attention to the problems raised by information asymmetries and the responses to them. Major sections deal with issues including shareholder objectives, agency and monitoring, adverse selection and signalling, reputation, and contracting and incentives.
The Theory of Corporate Finance also covers the application of the paradigms of corporate finance to particular aspects of corporate financial decisions and relationships. These include initial public offerings of common stock, the role of debt contracts, the relation between financial structure and the real asset and product markets, capital investment decisions, hedging and disclosure policy, insider trading, the effect of taxes on financial policy, takeover contests and the assignment of voting and control rights, and corporate bankruptcy.
Michael J. Brennan’s two volume set brings together key articles and papers which represent the current state of the financial theory of the corporation, ensuring that this collection will be an invaluable resource for scholars, students and practitioners of finance and financial economics.
The main paradigms in corporate finance are addressed in these volumes, with particular attention to the problems raised by information asymmetries and the responses to them. Major sections deal with issues including shareholder objectives, agency and monitoring, adverse selection and signalling, reputation, and contracting and incentives.
The Theory of Corporate Finance also covers the application of the paradigms of corporate finance to particular aspects of corporate financial decisions and relationships. These include initial public offerings of common stock, the role of debt contracts, the relation between financial structure and the real asset and product markets, capital investment decisions, hedging and disclosure policy, insider trading, the effect of taxes on financial policy, takeover contests and the assignment of voting and control rights, and corporate bankruptcy.
Michael J. Brennan’s two volume set brings together key articles and papers which represent the current state of the financial theory of the corporation, ensuring that this collection will be an invaluable resource for scholars, students and practitioners of finance and financial economics.
Critical Acclaim
‘The work is an exceptional collection of articles, one that I have already utilized in teaching a Ph.D. seminar in corporate finance. I would recommend the volumes as worthwhile investment to anyone desiring to explore the frontiers of corporate finance research.’
– Thomas H. Noe, The Journal of Finance
– Thomas H. Noe, The Journal of Finance
Contributors
46 articles, dating from 1976 to 1994
Contributors include: D.W. Diamond, M.J. Fishman, S.J. Grossman, O.D. Hart, D. Hirshleifer, M.C. Jensen, H. Leyland, W.H. Meckling, R.M. Mooradian, S. Titman
Contributors include: D.W. Diamond, M.J. Fishman, S.J. Grossman, O.D. Hart, D. Hirshleifer, M.C. Jensen, H. Leyland, W.H. Meckling, R.M. Mooradian, S. Titman
Contents
Volume I
Acknowledgements
Foreword by Richard Roll
Introduction by the editor
Part I Shareholder Objectives
1. H. DeAngelo (1981), ‘Competition and Unanimity’
2. L. Makowski (1983), ‘Competition and Unanimity Revisited’
3. H. Leland (1977), ‘Information, Managerial Choice and Stockholder Unanimity’
Part II Agency and Monitoring
4. M.C. Jensen and W.H. Meckling (1976), ‘Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure’
5. S.C. Myers (1977), ‘Determinants of Corporate Borrowing’
6. R.M. Stulz (1990), ‘Managerial Discretion and Optimal Financing Policies’
7. A. Shleifer and R.W. Vishny (1986), ‘Large Shareholders and Corporate Control’
8. B. Holmström and J. Tirole (1993), ‘Market Liquidity and Performance Monitoring’
Part III Adverse Selection and Signalling
9. S.C. Myers and N.S. Majlup (1984), ‘Corporate Financing and Investment Decisions when Firms have Information that Investors do not have’
10. H.E. Leland and D.H. Pyle (1977), ‘Informational Asymmetries, Financial Structure, and Financial Intermediation’
11. M.H. Miller and K. Rock (1985), ‘Dividend Policy under Asymmetric Information’
12. R. Ambarish, K. John and J. Williams (1987), ‘Efficient Signalling with Dividends and Investments’
13. M.J. Brennan and A. Kraus (1987), ‘Efficient Financing under Asymmetric Information’
Part IV Reputation
14. D.W. Diamond (1989), ‘Reputation Acquisition in Debt Markets’
15. A.W.A. Boot, S.I. Greenbaum and A.V. Thakor (1993), ‘Reputation and Discretion in Financial Contracting’
Part V Contracting and Incentives
16. P. Aghion and P. Bolton (1992), ‘An Incomplete Contracts Approach to Financial Contracting’
17. M.P. Narayanan (1985), ‘Managerial Incentives for Short-term Results’
18. D. Hirshleifer and Y. Suh (1992), ‘Risk, Managerial Effort and Project Choice’
Part VI Initial Public Offerings
19. K. Rock (1986), ‘Why New Issues are Underpriced’
20. I. Welch (1992), ’Sequential Sales, Learning, and Cascades’
21. C. Spatt and S. Srivastava (1991), ‘Preplay Communication, Participation Restrictions, and Efficiency in Initial Public Offerings’
Part VII Debt Markets
22. R.G. Rajan (1992),’ Insiders and Outsiders: The Choice between Informed and Arm’s-Length Debt’
23. D.W. Dimand (1993), ‘Seniority and Maturity of Debt Contracts’
Name Index
Volume II
Acknowledgements
An Introduction by the editor to both volumes appears in Volume I
Part I Financial Structure and the Real Asset and Products Markets
1. S. Titman (1984), ‘The Effect of Capital Structure on a Firm’s Liquidation Decision’
2. V. Maksimovic and J. Zechner (1991), ‘Debt, Agency Costs, and Industry Equilibrium’
3. A. Shleifer and R.W. Vishny (1992), ‘Liquidation Values and Debt Capacity: A Market Equilibrium Approach’
4. P. Volton and D.S. Scharfstein (1990), ‘A Theory of Predation Based on Agency Problems in Financial Contracting’
Part II Capital Investment and Valuation
5. M.J. Brennan (1990), ‘Latent Assets’
6. M.J. Brennan and D.S. Schwartz (1985), ‘ Evaluating Natural Resource Investments’
7. J.E. Ingersoll, Jr. and S.A. Ross (1992), ‘Waiting to Invest: Investment and Uncertainty’
8. H.E. Leland (1994), ‘Corporate Debt Value, Bond Covenants, and Optimal Capital Structure’
Part III Hedging, Disclosure Policy and Insider Trading
9. P.M. deMarzo and D. Duffie (1991), ‘Corporate Financial Hedging with Proprietary Information’
10. K.A. Froot, D.S. Scharfstein and J.C. Stein (1993), ‘Risk Management: Coordinating Corporate Investment and Financing Policies’
11. M.J. Fishman and K.M. Hagerty (1989), ‘Disclosure Decisions by Firms and the Competition for Price Efficiency’
12. H.E. Leland (1992), ‘Insider Trading: Should It Be Prohibited?’
Part IV Taxes and Financial Policy
13. M.H. Miller (1977), ‘Debt and Taxes’
14. F. Modigliani (1982), ‘Debt, Dividend Policy, Taxes, Inflation and Market Valuation’
15. S.A. Ross (1985), ‘Debt and Taxes and Uncertainty’
Part V Voting and Control
16. S.J. Grossman and O.D. Hart (1988), ‘One Share–One Vote and the Market for Corporate Control’
17. M. Harris and A. Raviv (1989), ‘The Design of Securities’
Part VI Takeover Contests
18. S.J. Grossman and O.D. Hart (1980), ‘Takeover Bids the Free-Rider Problem, and the Theory of the Corporation’
19. M.J. Fishman (1989), ‘Preemptive Bidding and the Role of the Medium of Exchange in Acquisitions’
20. D. Hirshleifer and S. Titman (1990), ‘Share Tendering Strategies and the Success of Hostile Takeover Bids’
Part VII Corporate Bankruptcy
21. R.M. Giammarino (1989), ‘The Resolution of Financial Distress’
22. R. Gertner and D. Scharfstein (1991), ‘A Theory of Workouts and the Effects of Reorganization Law’
23. R.M. Mooradian (1994), ‘The Effect of Bankruptcy Protection on Investment: Chapter 11 as a Screening Device’
Name Index
Acknowledgements
Foreword by Richard Roll
Introduction by the editor
Part I Shareholder Objectives
1. H. DeAngelo (1981), ‘Competition and Unanimity’
2. L. Makowski (1983), ‘Competition and Unanimity Revisited’
3. H. Leland (1977), ‘Information, Managerial Choice and Stockholder Unanimity’
Part II Agency and Monitoring
4. M.C. Jensen and W.H. Meckling (1976), ‘Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure’
5. S.C. Myers (1977), ‘Determinants of Corporate Borrowing’
6. R.M. Stulz (1990), ‘Managerial Discretion and Optimal Financing Policies’
7. A. Shleifer and R.W. Vishny (1986), ‘Large Shareholders and Corporate Control’
8. B. Holmström and J. Tirole (1993), ‘Market Liquidity and Performance Monitoring’
Part III Adverse Selection and Signalling
9. S.C. Myers and N.S. Majlup (1984), ‘Corporate Financing and Investment Decisions when Firms have Information that Investors do not have’
10. H.E. Leland and D.H. Pyle (1977), ‘Informational Asymmetries, Financial Structure, and Financial Intermediation’
11. M.H. Miller and K. Rock (1985), ‘Dividend Policy under Asymmetric Information’
12. R. Ambarish, K. John and J. Williams (1987), ‘Efficient Signalling with Dividends and Investments’
13. M.J. Brennan and A. Kraus (1987), ‘Efficient Financing under Asymmetric Information’
Part IV Reputation
14. D.W. Diamond (1989), ‘Reputation Acquisition in Debt Markets’
15. A.W.A. Boot, S.I. Greenbaum and A.V. Thakor (1993), ‘Reputation and Discretion in Financial Contracting’
Part V Contracting and Incentives
16. P. Aghion and P. Bolton (1992), ‘An Incomplete Contracts Approach to Financial Contracting’
17. M.P. Narayanan (1985), ‘Managerial Incentives for Short-term Results’
18. D. Hirshleifer and Y. Suh (1992), ‘Risk, Managerial Effort and Project Choice’
Part VI Initial Public Offerings
19. K. Rock (1986), ‘Why New Issues are Underpriced’
20. I. Welch (1992), ’Sequential Sales, Learning, and Cascades’
21. C. Spatt and S. Srivastava (1991), ‘Preplay Communication, Participation Restrictions, and Efficiency in Initial Public Offerings’
Part VII Debt Markets
22. R.G. Rajan (1992),’ Insiders and Outsiders: The Choice between Informed and Arm’s-Length Debt’
23. D.W. Dimand (1993), ‘Seniority and Maturity of Debt Contracts’
Name Index
Volume II
Acknowledgements
An Introduction by the editor to both volumes appears in Volume I
Part I Financial Structure and the Real Asset and Products Markets
1. S. Titman (1984), ‘The Effect of Capital Structure on a Firm’s Liquidation Decision’
2. V. Maksimovic and J. Zechner (1991), ‘Debt, Agency Costs, and Industry Equilibrium’
3. A. Shleifer and R.W. Vishny (1992), ‘Liquidation Values and Debt Capacity: A Market Equilibrium Approach’
4. P. Volton and D.S. Scharfstein (1990), ‘A Theory of Predation Based on Agency Problems in Financial Contracting’
Part II Capital Investment and Valuation
5. M.J. Brennan (1990), ‘Latent Assets’
6. M.J. Brennan and D.S. Schwartz (1985), ‘ Evaluating Natural Resource Investments’
7. J.E. Ingersoll, Jr. and S.A. Ross (1992), ‘Waiting to Invest: Investment and Uncertainty’
8. H.E. Leland (1994), ‘Corporate Debt Value, Bond Covenants, and Optimal Capital Structure’
Part III Hedging, Disclosure Policy and Insider Trading
9. P.M. deMarzo and D. Duffie (1991), ‘Corporate Financial Hedging with Proprietary Information’
10. K.A. Froot, D.S. Scharfstein and J.C. Stein (1993), ‘Risk Management: Coordinating Corporate Investment and Financing Policies’
11. M.J. Fishman and K.M. Hagerty (1989), ‘Disclosure Decisions by Firms and the Competition for Price Efficiency’
12. H.E. Leland (1992), ‘Insider Trading: Should It Be Prohibited?’
Part IV Taxes and Financial Policy
13. M.H. Miller (1977), ‘Debt and Taxes’
14. F. Modigliani (1982), ‘Debt, Dividend Policy, Taxes, Inflation and Market Valuation’
15. S.A. Ross (1985), ‘Debt and Taxes and Uncertainty’
Part V Voting and Control
16. S.J. Grossman and O.D. Hart (1988), ‘One Share–One Vote and the Market for Corporate Control’
17. M. Harris and A. Raviv (1989), ‘The Design of Securities’
Part VI Takeover Contests
18. S.J. Grossman and O.D. Hart (1980), ‘Takeover Bids the Free-Rider Problem, and the Theory of the Corporation’
19. M.J. Fishman (1989), ‘Preemptive Bidding and the Role of the Medium of Exchange in Acquisitions’
20. D. Hirshleifer and S. Titman (1990), ‘Share Tendering Strategies and the Success of Hostile Takeover Bids’
Part VII Corporate Bankruptcy
21. R.M. Giammarino (1989), ‘The Resolution of Financial Distress’
22. R. Gertner and D. Scharfstein (1991), ‘A Theory of Workouts and the Effects of Reorganization Law’
23. R.M. Mooradian (1994), ‘The Effect of Bankruptcy Protection on Investment: Chapter 11 as a Screening Device’
Name Index
