Book Review:Risk, Return and Equilibrium: A General Single-Period Theory of Asset Selection and Capital-Market Equilibrium. Bernell Kenneth Stone

1972 ◽  
Vol 45 (1) ◽  
pp. 118
Author(s):  
John B. Long, Jr.
Keyword(s):  
Capital Market ◽  
Market Equilibrium ◽  
Single Period ◽  
Asset Selection

A Single Period Stochastic Model for Maximising Firms Value

GIS Business ◽  
2016 ◽  
Vol 11 (6) ◽  
pp. 39-45
Author(s):  
J. P. Singh
Keyword(s):  
Capital Market ◽  
Firm Value ◽  
Capital Asset Pricing ◽  
Capital Asset ◽  
Asset Pricing Model ◽  
Value Maximization ◽  
Risk Return ◽  
Bankruptcy Costs ◽  
Single Period ◽  
Debt Capacity

This article sets up a single period value maximization model for the firm based on stochastic end-of-period cash inflows, stochastic bankruptcy costs and taxes based on income rather than wealth. The risk-return trade-off is captured in the Capital Asset Pricing Model. Thus, the model also assumes a perfect capital market and market equilibrium. The model establishes the existence of a unique optimal financial leverage at which the firm value is maximized, this leverage being less than the maximum debt capacity of the firm.

MARKET IMPERFECTIONS, CAPITAL MARKET EQUILIBRIUM AND CORPORATION FINANCE

1977 ◽  
Vol 32 (2) ◽  
pp. 307-319 ◽  
Author(s):  
Michael Brennan ◽  
R. C. Stapleton ◽  
M. G. Subrahmanyam
Keyword(s):  
Capital Market ◽  
Market Equilibrium ◽  
Market Imperfections
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