Robert C. Merton, On the Pricing of Corporate Debt: The Risk Structure of Interest Rates, The Journal of Finance, Vol. 29, No. 2, Papers and Proceedings of the Thirty-Second Annual Meeting of the American Finance Association, New York, New York, December 28-30, 1973 (May, 1974), pp. 449-470

Individual decision making behavior under uncertainty is queried by experiments. The subject's task is to allocate resources for projects with transformation results about which only uncertain expectations exist. The purpose is to get some insight into the information processing which determines the choice of an allocation rate. The data contradict any predictions based on a SEU model of decision making behavior under uncertainty. An heuristic information processing model is built which possesses better empirical validity than the SEU model. The model provides an alternative to Atkinson's theory, for it is demonstrated that individuals show both typical and atypical reactions in dynamic interaction. The variable ‘situation of an individual’ is defined which provides a mechanism to explain the observable switch in the priority ordering of needs.

Abstract This article presents a comment on the study of some observations on student values and their implications for accounting education in the U.S. If accounting majors are less concerned with wisdom and beauty than other students it may be incumbent upon accounting educators to raise the consciousness level of their students. This could be done by pointing out the scholarly background of accounting and the infinite complexities of designing a useful and reliable method of measuring economic and financial transactions.

Everyone seems to agree that there are significant interactions between corporate financing and investment decisions. The most important argument to the contrary — embodied in Modigliani and Miller's (MM's) famous Proposition I — specifically assumes the absence of corporate income taxes; but their argument implies an interaction when such taxes are recognized. Interactions may also stem from transaction costs or other market imperfections. The purpose of this paper is to present a general approach for analysis of the interactions of corporate financing and investment de-cisions, and to derive some of the approach's implications. Perhaps the most interesting implication is that the weighted average cost of capital formulas proposed by MM and other authors are not always correct. Except in certain special cases, a more general "Adjusted Present Value " rule should, in principle, be used to evaluate investment opportunities. The paper is organized as follows. Section II presents the

Presented at the American Finance Association Meeting, New York, December 1973.

This paper considers a stationary discrete dynamic programming model that is a generalization of the finite state and finite action Markov programming problem. We specify conditions under which an optimal stationary linear decision rule exists and show how this optimal policy can be calculated using linear programming, policy iteration, or value iteration. In addition we allow the parameters of the problem to be random variables and indicate when the expected values or these random variables are certainty equivalents.

The article looks at a study from 1973 which attempted to provide some empirical data of the nature of a basic management course. The author references papers published within a business management periodical while call for defined standards for the content, instruction, and objectives of such a course. Random members of the American Association of Collegiate Schools of Business (AACSB) were selected to respond to the study's questionnaire regarding foreseeable trends within basic management courses. Factors of class size and teaching method are considered.