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Toward a Positive Theory of Corporate Financial Policy
Author(s) -
FINDLAY M. C.,
WILLIAMS E. E.
Publication year - 1987
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1987.tb00144.x
Subject(s) - cornerstone , corporate finance , economics , valuation (finance) , financial modeling , neoclassical economics , financial economics , quarter (canadian coin) , finance , positive economics , macroeconomics , mathematical economics , art , visual arts , archaeology , history
This paper offers an alternative theoretical structure to the neoclassical valuation model that has been the cornerstone of theories of finance for a quarter of a century. It begins by outlining the neoclassical model in simple but surprisingly robust terms. More recent extensions and refinements are then discussed. The alternative model, which does not rely on modern financial economic theory but which is consistent with real world empirical behaviour, is developed next. Finally, a new research agenda for finance is proposed.