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Target Rates of Return and Corporate Asset and Liability Structure Under Uncertainty
Published online by Cambridge University Press: 19 October 2009
Extract
This paper examines the multiperiod capital allocation problem of a corporate division that is subject to ex post financial scrutiny by the parent corporation based upon meeting a specified target rate of return on investment. Using a zero-order decision rule, a deterministic equivalent linear programming model is developed to solve for the division's optimal mix of productive assets and the maturity structure of its debt.
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- Business Finance
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- Copyright © School of Business Administration, University of Washington 1971
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