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A Note on Optimal Equity Financing of the Corporation

Published online by Cambridge University Press:  19 October 2009

Stylianos Perrakis
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Extract

In a recent article in this journal [6], Clement G. Krouse and Wayne Y. Lee (hereafter K-L) presented a model of optimal equity financing of a corporation based on Pontryagin's maximum principle. In this note the basic assumption of a constant internal rate of return of the K-L model is relaxed. As a result, the financial implications of the K-L results remain essentially unchanged, but their applicability is extended considerably, and some undesirable solution characteristics are eliminated.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 11 , Issue 1 , March 1976 , pp. 157 - 164
Copyright
Copyright © School of Business Administration, University of Washington 1976

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Footnotes

*

University of Ottawa. The author wishes to thank Aharon G. Beged-Dov and a referee of this journal for helpful advice and comment.

References

REFERENCES

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