Finance, Theoretical and Applied

Stewart C. Myers ()
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Stewart C. Myers: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142

Annual Review of Financial Economics, 2015, vol. 7, issue 1, 1-34

Abstract: Like Caesar's Gaul, corporate finance is divided into three parts: theoretical, empirical, and normative. Important advances in any one of these three typically generate good ideas for the other two. I have been fortunate not to specialize in one part only. This review covers the history of capital structure theories, including the trade-off and pecking-order theories, and takes a skeptical view of how those theories have been tested so far. I give roughly equal space to normative, practical applications, including adjusted present value (APV), the valuation of real options, and the application of modern finance to regulation, insurance, the valuation of R&D, and the role of risk capital in financial institutions. Looking back, I realize that the supply of intriguing financial questions is inexhaustible.

Keywords: Autobiography; capital structure; corporate finance; real options; regulation; valuation (search for similar items in EconPapers)
JEL-codes: G31 G32 G34 G35 G38 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (8)

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