Accounting and Decision Making, Advertising expenses, Discretionary expenses, Financial reporting

Lease accounting, Operating leases

The continuing discussion on the cost of capital and related Issues has tended to focus on the capital market conditions, necessary to guarantee the validity of particular conclusions Works by F Modlgllani and M. H. Miller [4, 5, 6] and J Lintner [2], for example, are developed in this manner. The following discussion is developed from the standpoint of a firm borrowing funds in an uncertain world. An example expressed in terms of an individual borrower begins the analysis. The aim is to suggest a different approach to the capitalization and costing of contractual obligations (debt) than those current in both the theoretical and applied literature. A model is developed which expresses the cost of debt to the borrower as a function of both the expected rate and the promised rate of the debt contract. Using this analytic structure, the relationship between the two rates and the Implications of using either one as the cost of debt to the firm are explored. An hypothesis as to the behavior of the borrower (management and shareholders) provides a third expression for the cost of debt which is suggested to be superior to either alternative.

Wilbur W. Widicus, Jr., A Quantitative Analysis of the Small Business Investment Company Program, The Journal of Financial and Quantitative Analysis, Vol. 1, No. 1, Proceedings of the First Annual Meeting of the Western Finance Association (Mar., 1966), pp. 81-111

Journal Article The Two Sector Growth Model with Fixed Coefficients Get access W. M. Corden W. M. Corden Australian National University, Canberra Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 33, Issue 3, July 1966, Pages 253–262, https://doi.org/10.2307/2974419 Published: 01 July 1966

Journal Article The Expectations Hypothesis, the Yield Curve, and Monetary Policy: Comment Get access Jack W. Cox, Jack W. Cox Federal Reserve Bank of New York Search for other works by this author on: Oxford Academic Google Scholar Frederick W. Deming Frederick W. Deming Federal Reserve Bank of New York Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 80, Issue 2, May 1966, Pages 333–335, https://doi.org/10.2307/1880697 Published: 01 May 1966

T HIS PAPER considers a variety of theories of investment and attempts to find the importance of each of them. The theories considered fall into several groups. We shall consider these as parts of a single structure of investment which considers both supply and demand. The demand side of the model employs first, the acceleration principle using output, change in output, and expected output as explanatory variables. Next, this side of the model considers the cost of funds using the rate of interest, the flow of internal funds, and the debt-asset ratio. Finally, prices in the factor and product markets are considered. Supply restraints were taken into consideration by using the volume of unfilled orders and by restricting the analysis to the post Korean War period. This model is developed and discussed in the next section of this paper. It is well known that the investment process by an individual firm does not take place instantaneously but that there is a significant lag between the appearance of the need for additional capital goods and the actual investment. The lag structure employed is discussed in the third section of this paper. In the fourth section the data are discussed. This paper fails to find any significant effect on investment of prices or the volume of unfilled orders. All of the output variables and the cost of funds variables are of considerable importance. In particular, the rate of interest, flow of funds and debt asset ratio all play important roles. These empirical results are discussed in the fifth section below. II Theories of Investment Behavior