This article integrates strategic product market analysis with price-taking asset pricing theory. We demonstrate that a firm's market power can lead to scale-dependent and potentially infinite required returns. Scale dependency, which we relate to risk spillovers between expansionary and existing cash flows, reflects the divergence of incremental from existing required returns. The firm-specific nature of risk spillovers potentially destroys the concept of a common industry "risk class". Our analysis raises important questions regarding the validity of widely used "comparables" methods for determining risk-adjusted discount rates.

Journal Article Capital Longevity and Economic Growth Get access S. K. Bhattacharyya S. K. Bhattacharyya London School of Economics and Calcutta University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 32, Issue 1, January 1965, Pages 39–46, https://doi.org/10.2307/2296329 Published: 01 January 1965

Working capital literature is rather limited and the process of managing short‐term resources is not understood well by academicians. In contrast, corporate managers are continuously involved in the working capital decision-making process, but their perspective is limited to the practices within their firm. In order to fill this gap in the working capital literature, a study of management perceptions of the working capital process was undertaken. A survey was used to collect the information from the sample of marketing, production, and financial executives in large corporations in Belgium, France, India, and the United States. The study intercepts management ranking of working capital objectives and indicates the need to improve finacial planning models to include explicitly short–run objectives; further, predictability of cash inflows and outflows is examined and the potential factors affecting the predictability are evaluated. Finally, this study examines management perceptions of long-range objectives in order to provide a proper perspective to the short-run financial planning.