Risk, Return, and Equilibrium: A General Single-Period Theory of Asset Selection and Capital-Market Equilibrium.

1972 ◽  
Vol 27 (1) ◽  
pp. 161 ◽  
Author(s):  
Edward J. Kane ◽  
Bernell K. Stone
Keyword(s):  
Capital Market ◽  
Market Equilibrium ◽  
Risk Return ◽  
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.

A Single Period Stochastic Model for Maximising Firms Value

2016 ◽  
Vol 6 (1) ◽  
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

Testing Stock Market Efficiency Using Risk-Return Parity Rule

1988 ◽  
Vol 13 (2) ◽  
pp. 61-66
Author(s):  
N P Srinivasan ◽  
M S Narasimhan
Keyword(s):  
Stock Market ◽  
Market Efficiency ◽  
Capital Market ◽  
Industrial Growth ◽  
Information Efficiency ◽  
Share Prices ◽  
Risk Return ◽  
Parity Rule ◽  
Stock Market Efficiency ◽  
The Subject

Although the concepts of efficiency have been extensively researched, an efficient stock market has remained elusive. The subject is of particular concern in India now because of the increasing dependence on the capital market for financing industrial growth. S K Barua and V Raghunathan presented two articles in Vikalpa (July-September 1986 and July-September 1987) arguing that the Indian capital market was inefficient. Using Reliance share prices, they tried to demonstrate that schemes yielding returns unrelated to risk existed. Srinivasan and Narasimhan in this article question the methodology used by Barua and Raghunathan and elaborate on the concepts of risk-return parity and efficiency, drawing a distinction between information efficiency and market efficiency.

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