The weighted average cost of capital (Ko) is presented in virtually all textbooks in financial management and capital budgeting as a practical concept fundamental to the actual selection of optimal financial and investment alternatives. As often employed Ko can be defined aswhereKo = the weighted average cost of capital, Ks = the cost of equity capital, Kb = the cost of debt capital, S = the market value of the firm's equity, B = the market value of the firm's debt, andV = S + B, the total market value of the firm.

Subjective probability, Elicitation technique, Successive subdivision technique, Direct magnitude estimation technique

Prediction, Decision making, Sequential patters, Time-series

Ian R. C. Eggleton, [Discussion of Patterns, Prototypes, and Predictions: An Exploratory Study]: A Reply, Journal of Accounting Research, Vol. 14, Studies on Human Information Processing in Accounting (1976), pp. 145-158

Rowland R. Hill, An Algorithm for Counting the Number of Possible Portfolios Given Linear Restrictions on the Weights, The Journal of Financial and Quantitative Analysis, Vol. 11, No. 3 (Sep., 1976), pp. 479-480

1. This paper presents and tests a model of dealer inventory response. The estimated inventory responsiveness coefficient is statistically significant and its magnitude is consistent with reasonable values of underlying variables which, it is hypothesized, determine the coefficient.2. The sign of the inventory responsiveness coefficient indicates that dealers tend to be passive and acquire shares when prices fall and sell shares when prices rise. This type of behavior is sometimes termed “stabilizing.”3. Dealer inventories tend to increase on days prior to price declines and tend to decrease on days prior to price increases; that is, inventory changes tend to be “destabilizing” with respect to future price changes. This implies that a fraction of the public trades on superior information and that dealers tend to lose money to such information traders.4. There is a strong tendency for dealer inventory levels to return to normal, presumably zero. The implied typical inventory holding period is about 8 to 10 trading days.5. Comparison of NASDAQ dealers and NYSE specialists shows that the pattern of inventory responsiveness is very much the same for the two. This suggests that both act in accordance with the underlying economic model and that differential regulation has little effect on typical inventory responsiveness.6. This finding does not obviate the possibility that individual dealers or specialists behave in atypical or undersirable ways, and that the extent of such atypical behavior might depend on the degree of public regulation of dealer activities. An exhaustive comparative study of deviations from normal behavior was not possible. However, it was possible to compare the frequency of nonstabilizing transactions in which price change and inventory change on a given day are in the same, rather than opposite, direction. One could not conclude that NASDAQ dealers had more nonstabilizing activity than NYSE specialists.

Journal Article Optimal Policy Rules for a Temporary Incomes Policy Get access Franklin R. Shupp Franklin R. Shupp University of Illinois Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 2, June 1976, Pages 249–259, https://doi.org/10.2307/2297321 Published: 01 June 1976

Journal Article The Economic Contribution of Michael James Farrell Get access Malcolm R. Fisher Malcolm R. Fisher Downing College, Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 3, October 1976, Pages 371–382, https://doi.org/10.2307/2297214 Published: 01 October 1976 Article history Received: 01 September 1976 Accepted: 01 September 1976 Published: 01 October 1976

Journal Article Money Wage Inflation in Industrial Countries: An Alternative Explanation Get access R. L. Thomas R. L. Thomas University of Salford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 3, October 1976, Pages 551–552, https://doi.org/10.2307/2297235 Published: 01 October 1976 Article history Received: 01 August 1975 Accepted: 01 December 1975 Published: 01 October 1976