effects of dividend policy on corporate financial growth, is a major concern of most entities. whether dividends have an influence on the value of the firm, is an important question in dividend policy. this study aimed at investigating the effects of dividend policy on financial growth of media firms. the study was conducted in nairobi at the nation media group headquarters. respondents were se...

Evaluating capital requirements as well as allocating total capital into various business units are becoming increasingly important part of the risk management process of a financial enterprise. In the allocation of capital, we consider the purpose of capital allocation within a company (individual, collective, or market-relative), the manner in which the portfolios within the conglomerate can ...

The recent literature on taxation and growth has stressed the optimality of a zero long-run taxation on all accumulative factors of production. For a given path of government spending, the optimal tax plan requires the government to build up a positive stock of public wealth in the short run in the long-run, government spending can be financed with the income accruing from the management of the...

Francis A. Longstaff is Associate Professor An often-cited rule in corporate finance is that a firm should call a bond as soon as of Finance at UCLA, Los Angeles, CA. Bruce the bond's market price equals its call price. But, in fact, many callable bonds sell for A. Tuckman is Vice President at Salomon more than their call prices. One explanation is that the implicit assumption that calls Brothe...

The joint determination of capital structure and investment risk is examined. Optimal capital structure re ects both the tax advantages of debt less default costs (Modigliani-Miller), and the agency costs resulting from asset substitution (Jensen-Meckling). Agency costs restrict leverage and debt maturity and increase yield spreads, but their importance is relatively small for the range of envi...

We study how equity and debt contracts commit investors to discipline managers. Our model shows that the optimal allocation of debt, equity, and control rights depends on which disciplinary action is more efficient. When the efficient action is managerial replacement, then control rights should be allocated to equity holders, and capital structure should consist of equity and long-term debt. Wh...

This paper studies the optimal financing contract of a bank with risk-shifting incentives and private information, in an environment with macroeconomic uncertainty. Leverage mitigates adverse selection problems owing to debt information-insensitivity, but leads to excessive risk-taking. I show that the optimal leverage is procyclical in the laissez-faire equilibrium, and contingent convertible ...

In a general equilibrium model we examine the optimal allocation of equity and debt across banks and industrial rms when both are plagued by incentive problems and rms can borrow from banks. Increasing bank equity mitigates bank-level moral hazard but may exacerbate rm-level moral hazard due to dilution of rm equity. Competition of banks will not result in a socially e cient level of equity. Im...

We introduce capital flow constraints, loss of good will and loan to the lot sizing problem. Capital flow constraint is different from traditional capacity constraints: when a manufacturer launches production, its present capital should not be less than its present total production cost; otherwise, it must decrease production quantity or suspend production. Unsatisfied demand in one period may ...