## Earnings Variability, Financial Structure and the Value of the Firm |

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### Contents

Conceptual Problems Encountered in Empirical | 5 |

Statement of the Problem | 9 |

Summary of Principal Findings | 13 |

Copyright | |

5 other sections not shown

### Common terms and phrases

addition of non-equity Analysis of Variance arbitrage argument assets assumption basic business risk basis capital structure effects capitalization rate function cash flow chapter Coefficient of Determination constant wealth lines correlation analysis Correlation Coefficient Cost of Capital criterion David Durand debt differences differential Durand earnings flows earnings growth rates earnings stream earnings variability earnings yields effects of capital empirical employed equity capitalization rates equity shares equity yields expected value financial management fixed charge coverage fixed commitment financing flow net operating given hypothesized income per share increases in leverage industry interest rate investment investor behavior leverage effects leverage measure market value maximization moderate leverage Modigliani and Miller multiple correlation non-equity financing operating income theory Operating Income Variability opportunity boundary overall capitalization rate overall cost percent profit maximization regression coefficients returns risk and earnings risk premiums sample firms shareholder wealth statistical tangency Theory of Financial uncertainty validity valuation theory variability measure