search query: @author Dobbs, I. M. / total: 6
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| Author: | Appleyard, T. Dobbs, I. M. |
| Title: | Value under active and passive debt management policy |
| Journal: | Journal of Business Finance and Accounting
1997 : APR, VOL. 24:3/4, p. 481-496 |
| Index terms: | CAPITAL BUDGETING CAPITAL DEBT MANAGEMENT CAPITAL STRUCTURE OF COMPANIES |
| Language: | eng |
| Abstract: | The relationship between debt policy and valuation within a Modigliani-Miller framework has been analysed in the finance literature: the consensus is that valuation is affected by whether debt is managed passively or actively, and that for finite projects with time varying risky cash flows it is good to use a weighted average discount rate for valuation only if it is assumed that debt is actively managed. The relationship between debt policy and valuation is re-examined in this study, and it is shown that valuation using a simple weighted average discount rate is possible, under one of the most plausible forms of passive debt policy . |
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