Introduction: Capital Formation, Risk, and the Corporation

John B. Guerard and Eli Schwartz
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John B. Guerard: McKinley Capital Management, Inc.
Eli Schwartz: Lehigh University

Chapter Chapter 1 in Quantitative Corporate Finance, 2007, pp 1-10 from Springer

Abstract: Abstract The corporation is the major institution for private capital formation in our economy. The corporate firm acquires funds from many different sources to purchase or hire economic resources, which are then used to produce marketable goods and services. Investors in the corporation expect to be rewarded for the use of their funds; they also take losses if the investment does not succeed. The study of corporation finance deals with the legal arrangement of the corporation (i.e., its structure as an economic institution), the instruments and institutions through which capital can be raised, the management of the flow of funds through the individual firm, and the methods of dividing the risks and returns among the various contributors of funds.

Date: 2007
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DOI: 10.1007/978-0-387-34465-2_1

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