## Financial Theory and Corporate PolicyA recognized classic, Financial Theory and Corporate Policy is thoroughly updated in this third edition. The authors provide a concise, unified treatment of finance, combining theory, empirical evidence, and applications. Recent major contributions in financial literature are discussed and all current literature is summarized. The book provides MBA and doctoral students with an excellent bridge to prevailing scholarship in finance. |

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### Contents

THE THEORY OF FINANCE | 1 |

Consumption and investment without capital markets 3 G Indifference curves | 14 |

Shareholder unanimity 17 D The agency problem 18 D Dividends versus capital | 29 |

Copyright | |

34 other sections not shown

### Common terms and phrases

acquiring firms adjustment assume beta call option capital budgeting capital gains capital markets capital structure CAPM cash flows Chapter common stock conglomerate conglomerate mergers cost of capital cost of equity covariance debt distribution dividend payout dividend policy dollar earnings per share Economics end-of-period equal equation equilibrium estimate example exchange rates exercise price expected return expected utility firm's future income increase indifference curve individual interest rate investors Journal of Finance leverage linear marginal market efficiency market line market portfolio market value matrix maximize merger Modigliani-Miller opportunity set optimal option pricing payments payoff period positive present value problem pure securities rate of return ratio relationship result risk aversion risk-free rate risky assets security market line shareholders slope standard deviation stochastic dominance stock price systematic risk Table tax rate theory trade utility function valuation variable variance wealth weighted average cost zero