In 1958 an academic paper on corporate finance written by two professors (Merton Miller and Frances Modigliani, who were later awarded the Nobel prize for their research efforts) was published in The American Economic Review. One prime conclusion of their paper was that the exact form of a firm's capital structure did not affect the firm's value.

Later papers by the same two authors and by many others modified the assumptions and changed this conclusion. We now think that capital structure decisions do affect a firm's value and corporate managers should understand better the financing alternatives that are available.

One of the most important financial decisions is the decision to buy or lease assets. The leasing industry is large and getting larger. Unfortunately, it is very easy for a firm to evaluate incorrectly lease alternatives (see Chapter 12).

The capital structure decision is one of the three most important financial decisions that management make (the distribution of earnings and the capital budgeting decisions are the other two contenders). Managers should increase their understanding of capital structure alternatives and remember that choosing the best capital structure is an art and not an exact simple calculation. But applying the art can be improved with understanding.

Attempting to reveal the real causes of the 1929 stock market crash, Bierman refutes the popular belief that wild speculation had excessively driven up stock market prices and resulted in the crash. Although he acknowledges some prices of stocks such as utilities and banks were overprices, reasonable explanations exist for the level and increase of all other securities stock prices. Indeed, if stocks were overpriced in 1929, then they more even more overpriced in the current era of staggering growth in stock prices and investment in securities. The causes of the 1929 crash, Bierman argues, lie in an unfavorable decision by the Massachusetts Department of Public Utilities coupled with the popular practice known as debt leverage in the 1920s corporate and investment arena.

This book extends Bierman's argument in an earlier book, "The Great Myths of 1929 and the Lessons to Be Learned" (Greenwood, 1991), in which he discussed and refuted seven myths about 1929 but could not explain the crash. He now believes he has a reasonable explanation. He also examines the actions of Charles E. Mitchell and Sam Insull and their subsequent unjust criminal prosecution after the crash of the 1929 stock market.

This book reexamines the economic crash of 1929 and compares the event to the modern stock market crash of 2008-2009. Twice in the last century the usually stalwart economy of United States has crumbled—first in 1929, when the stock market crash that led to the Great Depression hit, and again with the financial market meltdown of 2008-2009 that is still crippling much of America. While it is still too soon to state unequivocally how this latest economic disaster came about, it is possible to theorize that much of what has happened could have been foreseen and even avoided—just as it could have been in 1929. This book accurately describes the economic situations in the United States before the 1929 and 2008-2009 stock market crashes, and carefully examines the causes of both financial crises. This comprehensive assessment of both time periods allows readers to better grasp the present market situation, understand the connection between the explosion of the sub-prime mortgage market and the current state of the economy, and more wisely forecast the future.

Corporations earn incomes and amass wealth. There are many books offering advice how to increase the profitability of corporations by achieving excellence in operations and choosing the correct strategic path. Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge is concerned with how the corporation should reward its shareholders after the incomes are earned. Investment decisions, capital structure, and dividend policy must be coordinated so that the well being of the firm's stockholders is considered in the planning process. The corporate planners should realize that the individual investors are also making plans, and the corporation can assist this planning process by making its own financial plans and strategies well known.

Financial Strategies and Topics in Finance is a collection of Professor Emeritus Harold Bierman, Jr.'s public lectures on corporate finance, given on behalf of the Johnson School of Business, Cornell University, from 1960 to 2015.By explaining complex financial strategies in a simplified manner, Professor Bierman makes corporate finance accessible to the non-expert reader as well. This collection of lectures covers highly relevant topics with financial insights and implications, that are very important to business managers and individual investors. Complex business decisions are simplified, allowing the logic of the decision process to become readily apparent.As Professor Bierman writes, 'A good business education will build on the basic financial tool of the time value of money and the net present value calculation. The lectures presented in this book are consistent with good present value calculations.'

Financial Strategies and Topics in Finance is a collection of Professor Emeritus Harold Bierman, Jr.'s public lectures on corporate finance, given on behalf of the Johnson School of Business, Cornell University, from 1960 to 2015.By explaining complex financial strategies in a simplified manner, Professor Bierman makes corporate finance accessible to the non-expert reader as well. This collection of lectures covers highly relevant topics with financial insights and implications, that are very important to business managers and individual investors. Complex business decisions are simplified, allowing the logic of the decision process to become readily apparent.As Professor Bierman writes, 'A good business education will build on the basic financial tool of the time value of money and the net present value calculation. The lectures presented in this book are consistent with good present value calculations.'

As the twenty-first century begins, the world finds itself with a wide range of possible economic futures. Many corporations find it difficult to compete in international markets with the result being shrinking revenue. Too many governments utilize an excessively high percentage of their nation's goods and services. In the past, some countries could afford to have a less than perfect tax system. However, wage and other labor rigidities (work rules) handcuff management. Management has become pre-occupied with non-productive pursuits, and numerous other sources of inefficiency. The objective of this book is to suggest several revisions in institutional structure, management techniques and rewards, and a drastic change in how hourly labor is compensated. The suggestions offered are applicable to any economy where decisions have to be made as to how to organize the factors of production most efficiently. It is therefore essential reading for policymakers, human resource management and accountant management.

This book introduces corporate financial management, based on the basic capital budgeting framework and the time value of money. It focuses on theoretical formulations and correct application of financial techniques that will help improve managerial and financial decisions. Based on fundamental principles of accounting and finance like time value of money and after-tax cash flows, it introduces readers to real-world constraints and complexities in the two fields.Written in a simple and accessible manner, this book can be read by students of finance and accounting courses, business professionals and general public alike.

This book is a companion volume to the author's classic The Capital Budgeting Decision and explores the complexities of capital budgeting as well as the opportunities to improve the decision process where risk and time are important elements.

There is a long list of contenders for the next breakthrough for making capital budgeting decisions and this book gives in-depth coverage to:

• Real options. The value of a project must take into consideration the flexibility that it provides management, acknowledging the option of making decisions in the future when more information is available. This book emphasizes the need to assign a value to this flexibility, and how option-pricing theory (also known as contingent claims analysis) sometimes provides a method for valuing flexibility.
• Decomposing cash flows. A project consists of many series of cash flows and each series deserves its own specific risk-adjusted discount rate. Decomposing the cash flows of an investment highlights the fact that while managers are generally aware that divisions and projects have different risks, too often they neglect the fact that the cash flow components may also have different risks, with severe consequences on the quality of the decision-making.

Designed to assist business decisions at all levels, the emphasis is on the applications of capital budgeting techniques to a variety of issues. These include the hugely significant buy versus lease decision which costs corporations billions each year. Current business decisions also need to be made considering the cross-border implications, and global business aspects, identifying the specific aspects of internationalinvestment decisions, appear throughout the book.

This book is a companion volume to the author's classic The Capital Budgeting Decision and explores the complexities of capital budgeting as well as the opportunities to improve the decision process where risk and time are important elements.

There is a long list of contenders for the next breakthrough for making capital budgeting decisions and this book gives in-depth coverage to:

• Real options. The value of a project must take into consideration the flexibility that it provides management, acknowledging the option of making decisions in the future when more information is available. This book emphasizes the need to assign a value to this flexibility, and how option-pricing theory (also known as contingent claims analysis) sometimes provides a method for valuing flexibility.
• Decomposing cash flows. A project consists of many series of cash flows and each series deserves its own specific risk-adjusted discount rate. Decomposing the cash flows of an investment highlights the fact that while managers are generally aware that divisions and projects have different risks, too often they neglect the fact that the cash flow components may also have different risks, with severe consequences on the quality of the decision-making.

Designed to assist business decisions at all levels, the emphasis is on the applications of capital budgeting techniques to a variety of issues. These include the hugely significant buy versus lease decision which costs corporations billions each year. Current business decisions also need to be made considering the cross-border implications, and global business aspects, identifying the specific aspects of internationalinvestment decisions, appear throughout the book.

Harold Bierman, Jr., is the Nicholas H. Noyes Professor of Business Administration at the Johnson Graduate School of Management, Cornell University.

Seymour Smidt is Professor Emeritus at the Johnson Graduate School of Management, Cornell University.

In 1958 an academic paper on corporate finance written by two professors (Merton Miller and Frances Modigliani, who were later awarded the Nobel prize for their research efforts) was published in The American Economic Review. One prime conclusion of their paper was that the exact form of a firm's capital structure did not affect the firm's value. Later papers by the same two authors and by many others modified the assumptions and changed this conclusion. We now think that capital structure decisions do affect a firm's value and corporate managers should understand better the financing alternatives that are available. One of the most important financial decisions is the decision to buy or lease assets. The leasing industry is large and getting larger. Unfortunately, it is very easy for a firm to evaluate incorrectly lease alternatives (see Chapter 12). The capital structure decision is one of the three most important financial decisions that management make (the distribution of earnings and the capital budgeting decisions are the other two contenders). Managers should increase their understanding of capital structure alternatives and remember that choosing the best capital structure is an art and not an exact simple calculation. But applying the art can be improved with understanding.

Corporations earn incomes and amass wealth. There are many books offering advice how to increase the profitability of corporations by achieving excellence in operations and choosing the correct strategic path. Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge is concerned with how the corporation should reward its shareholders after the incomes are earned. Investment decisions, capital structure, and dividend policy must be coordinated so that the well being of the firm's stockholders is considered in the planning process. The corporate planners should realize that the individual investors are also making plans, and the corporation can assist this planning process by making its own financial plans and strategies well known.

Fully updated and revised by international authorities on the topic, this new version of a classic and established text returns to its roots as a clear and concise introduction to this complex but essential topic in corporate finance.

Retaining the authority and reputation of previous editions, it now covers several topics in-depth which are frequently under explored, including distribution policy and capital budgeting.

Features new to this edition include:

• a new chapter on real options
• new material on uncertainty in decision-making.

Easily understandable, and covering the essentials of capital budgeting, this book helps readers to make intelligent capital budgeting decisions for corporations of every type.

Fully updated and revised by international authorities on the topic, this new version of a classic and established text returns to its roots as a clear and concise introduction to this complex but essential topic in corporate finance.

Retaining the authority and reputation of previous editions, it now covers several topics in-depth which are frequently under explored, including distribution policy and capital budgeting.

Features new to this edition include:

• a new chapter on real options
• new material on uncertainty in decision-making.

Easily understandable, and covering the essentials of capital budgeting, this book helps readers to make intelligent capital budgeting decisions for corporations of every type.