The Modigliani and Miller Propositions: The History of a Failed Foundation for Corporate Finance?

The Modigliani and Miller (MM) propositions provide a foundation for corporate finance theory. Nevertheless, this paper argues that their adoption has led to a disengagement of such theory from the humanity of business, as well as, more broadly, from concepts of corporate strategic management. As a...

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Publicado en:Abacus Vol. 50; no. 3; pp. 279 - 296
Autor principal: Dempsey, Mike
Formato: Artículo
Publicado: Wiley-Blackwell Sep2014
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Modigliani and Miller Propositions: The History of a Failed Foundation for Corporate Finance?
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        au: Dempsey, Mike
        affil: School of Economics, Finance and Marketing, RMIT University, Melbourne Australia
      su:
        Capital structure
        Corporate finance
        Strategic planning
        Dividends
        Investments
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          Capital structure
          Corporate finance
          Strategic planning
          Dividends
          Investments
      keyword: Modigliani and Miller propositions
      ab: The Modigliani and Miller (MM) propositions provide a foundation for corporate finance theory. Nevertheless, this paper argues that their adoption has led to a disengagement of such theory from the humanity of business, as well as, more broadly, from concepts of corporate strategic management. As a result, the context within which textbooks allow corporate investment and financial decisions to take place is severely distorted from reality. The paper argues that we require the context of behavioural and strategic corporate management if we are to accommodate the reality of business, the behaviour of formalised groups, and an ethical dimension to business.
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    language: English
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