Financial Arrangements

T. V. S. Ramamohan Rao ()
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T. V. S. Ramamohan Rao: Indian Institute of Technology Kanpur

Chapter Chapter 9 in Managerial Discretion in Imperfect Markets, 2023, pp 141-154 from Springer

Abstract: Abstract The relationship between production and financial decisions has been acknowledged for a long time. Recognizing the imperfections in the financial markets, the entire debate was whether the financial choices should be left to the management in an implicit contract or coordinated by the shareholders in a governance relationship. Managerial discretion in the choice of the debt–equity ratio has been at the center of the debate. Both the cost of capital and the quantum of finances have been subject to such discretion. Rapid changes in the market environment create a greater degree of managerial discretion.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-1537-8_9

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DOI: 10.1007/978-981-99-1537-8_9

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