ABSTRACT The theory of corporate finance is not directly applicable to financial intermediary decision‐making. The lack of applicability stems largely from the particular conditions that distinguish intermediary operations from those of the nonfinancial firm. First, when intermediaries accept deposit financing, they must produce services such as liquidity and convenience at considerable expense for real resources. Second, the introduction of intermediation is likely to be accompanied by incomplete markets so that shareholder unanimity is not in general valid. In this paper, a model with incomplete markets is developed and a shareholder approved rule for intermediary capital structure decisions is derived.

Non-manipulable direct revelation social choice functions are characterized for societies where the space of alternatives is a euclidean space and all voters have separable star-shaped preferences with a global optimum. If a non-manipulable choice function satisfies a weak unanmity-respecting condition (which is equivalent to having an unrestricted range) then it will depend only on voters' ideal points. Further, such a choice function will decompose into a product of one-dimensional mechanisms in the sense that each coordinate of the chosen point depends only on the respective coordinate of the voters' ideal points. Each coordinate function will also be non-manipulable and respect unanimity. Such one-dimensional mechanisms are uncompromising in the sense that voters cannot take an extreme position to influence the choice to their advantage. Two characterizations of uncompromising choice functions are presented. One is in terms of a continuity condition, the other in terms of “phantom voters” i.e. those points which are chosen which are not any voter's ideal point. There are many such mechanisms which are not dictatorial. However, if differentiability is required of the choice function, this forces it to be either constant or dictatorial. In the multidimensional case, non-separability of preferences leads to dictatorship, even if preferences are restricted to be quadratic.

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This paper reviews much of the scientific literature on the market for corporate control. The evidence indicates that corporate takeovers generate positive gains, that target firm shareholders benefit, and that bidding firm shareholders do not lose. The gains created by corporate takeovers do not appear to come from the creation of market power. With the exception of actions that exclude potential bidders, it is difficult to find managerial actions related to corporate control that harm shareholders. Finally, we argue the market for corporate control is best viewed as an arena in which managerial teams compete for the rights to manage corporate resources.

Periods of high mortgage interest rates that characterized the early 1980s have escalated the use of assumption financing in home buying. In these periods, there is an increased demand for alternative sources of financing and a movement away from conventional sources. The purpose of this study is to provide a theoretical and empirical analysis of the effect of the increased use of assumption financing on selling prices of single-family residential housing. Aside from physical characteristics, the financing arranged by the homebuyer is considered a major influence in determining house prices. This is especially true in real estate appraisal practice where differences in types of financing are one of the major categories of adjustment (see [1], [4], and [10]).

Abstract Reviews the book "Financial Accounting," by Loren A. Nikolai and John D. Bazley.

Abstract Reviews the book "Financial Accounting," by William W. Pyle and Kermit D. Larson.

Abstract Reviews the book "Controller Involvement in Management," by Vijay Sathe.