Handbook of the Economics of Finance: Corporate Finance (Volume 1A)

Volume 1A covers corporate finance: how businesses allocate capital - the capital budgeting decision - and how they obtain capital - the financing decision. Though managers play no independent role in the work of Miller and Modigliani , major contributions in finance since then have shown that managers maximize their own objectives. To understand the firm's decisions, it is therefore necessary to understand the forces that lead managers to maximize the wealth of shareholders. This handbook surveys developments in the three main branches of finance research: corporate finance and banking; asset pricing; and the structure of financial markets. Each essay is written by leaders in the surveyed field of research. Authors include Franklin Allen, Patrick Bolton, Michael Brennan, John Campbell, Darrell Duffie, Michael Jensen, Stewart Myers, Edward Prescott, Raghuram Rajan, Stephen Ross, Jeremy Stein, Rene Stulz, Richard Thaler and Luigi Zingales. The handbook is designed to provide readers with a comprehensive picture of the state of the art of finance research At the most basic level a corporate governance problem arises whenever an outside investor wishes to exercise control differently from the manager in charge of the firm. v. 1A. Corporate finance v. 1B. Financial markets and asset pricing.