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The Ownership of the Firm, Corporate Finance, and Derivatives

This book clarifies several ambiguous arguments and claims in finance and the theory of the firm. It also serves as a bridge between derivatives, corporate finance and the theory of the firm. In addition to mathematical derivations and theories, the book also uses anecdotes and numerical examples to explain some unconventional concepts. The main arguments of the book are: (1) the ownership of the firm is not a valid concept, and firms’ objectives are determined by entrepreneurs who can innovate to earn excess profits; (2) the Modigliani-Miller capital structure irrelevancy proposition is a restatement of the Coase theorem, and changes in the firm’s debt-equity ratio will not affect equity-holders’ wealth (welfare), and equity-holders’ preferences toward risk (or variance) are irrelevant; (3) all firms' resources are options, and every asset is both a European call and a put option for any other asset; and (4) that a first or residual claim between debt and equity is non-existent while the first claim among fixed-income assets can actually affect the market values of these assets.

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Detail Information
Series Title
SpringerBriefs in Finance
Call Number
XII, 76, 11 b/w illust
Publisher
: Springer Singapore.,
Collation
XII, 76, 11 b/w illustrations
Language
English
ISBN/ISSN
978-981-287-353-8
Classification
NONE
Content Type
text
Media Type
computer
Carrier Type
online resource
Edition
1
Subject(s)
Financial Economics
Microeconomics,
Finance, general,
Specific Detail Info
-
Statement of Responsibility
Other Information
Cataloger
Suwardi
Source
https://link.springer.com/book/10.1007/978-981-287-353-8
Validator
Maya
Digital Object Identifier (DOI)
-
Journal Volume
-
Journal Issue
-
Subtitle
-
Parallel Title
-
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File Attachment
  • The Ownership of the Firm, Corporate Finance, and Derivatives
    This book clarifies several ambiguous arguments and claims in finance and the theory of the firm. It also serves as a bridge between derivatives, corporate finance and the theory of the firm. In addition to mathematical derivations and theories, the book also uses anecdotes and numerical examples to explain some unconventional concepts. The main arguments of the book are: (1) the ownership of the firm is not a valid concept, and firms’ objectives are determined by entrepreneurs who can innovate to earn excess profits; (2) the Modigliani-Miller capital structure irrelevancy proposition is a restatement of the Coase theorem, and changes in the firm’s debt-equity ratio will not affect equity-holders’ wealth (welfare), and equity-holders’ preferences toward risk (or variance) are irrelevant; (3) all firms' resources are options, and every asset is both a European call and a put option for any other asset; and (4) that a first or residual claim between debt and equity is non-existent while the first claim among fixed-income assets can actually affect the market values of these assets.
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