Présentation de l'éditeur
LlN lAR PliOGRAMMING FOR FIMNCI.L PLANNING UNDER UNCERTAINTYS tewart C. Myers The purpose of this paper is to propose, justify and explain the properties of a class of linear programming (hereafter LP )approaches to long-terra, corporate financial planning under uncertainty. The models discussed are novel in the following respects. 1. They are directly based on a theory of market equilibrium under uncertainty. Thus the capabilities of the model to deal with choice among risky assets and liabilities can be rigorously justified, assuming that the firms objective is to maximize share price. Past linear programming models have been constructed assuming certainty, and have dealt with some aspects of uncertainty through heuristic modifications. 2. The models yield simultaneous solutions for the firms optimal financing and investment decisions. The financing decision is not considered with the investment decision given nor viceversa, 3. Some practical difficulties associated with the cost of capital concept are avoided. The traditional weighted average cost of capital does not appear in these LP models. The first two characteristics should lead to some interest in the models as theory; the third, along with the ease of solution of Probably the most important contributions are those of Weingartner [24 ]and Charnes, Cooper and Miller [4 ]. See also Weingartner ssurvey article [23
(Typographical errors above are due to OCR software and don't occur in the book.)
About the Publisher
Forgotten Books is a publisher of historical writings, such as: Philosophy, Classics, Science, Religion, History, Folklore and Mythology.
Forgotten Books' Classic Reprint Series utilizes the latest technology to regenerate facsimiles of historically important writings. Careful attention has been made to accurately preserve the original format of each page whilst digitally enhancing the aged text.
Présentation de l'éditeur
The models yield simultaneous solutions for the firms optimal financing and investment decisions. The financing decision is not considered with the investment decision given, nor viceversa. 3. Some practical difficulties associated with the cost of capital concept are avoided. The traditional weighted average cost of capital does not appear in these LP models. The first two characteristics should lead to some interest in the mosels as theory; the third, along with the ease of solution of LP problems, should generate interest in the models as practical decision-making tools. However, this paper does not include a detailed model for practical application. The paper is organized as follows. The general linear format is explained in the next section. The key assumption justifying it is that the structure of security prices at equilibrium is best described by the class of security valuation models which imply risk-independence of financing and investment options. The following section examines a simple model in detail, and contrasts the LP approach with traditional approaches using the cost of capital. Practical inplications of the model are discussed in the third section. I. THE LINEAR FORMAT FOR FINANCIAL PLANNING Introduction We will consider the firms financial planning problem in the following terms.
(Typographical errors above are due to OCR software and don't occur in the book.)
About the Publisher
Forgotten Books is a publisher of historical writings, such as: Philosophy, Classics, Science, Religion, History, Folklore and Mythology.
Forgotten Books' Classic Reprint Series utilizes the latest technology to regenerate facsimiles of historically important writings. Careful attention has been made to accurately preserve the original format of each page whilst digitally enhancing the aged text.
Les informations fournies dans la section « A propos du livre » peuvent faire référence à une autre édition de ce titre.
