Finance

Since the 2008 market crash, banking interests and economists have clashed over how much of their operations banks should fund with equity as opposed to debt. Bankers and others often say that, "equity is expensive." By contrast, a recent paper, coauthored by three faculty of the Stanford Graduate...
By Anat Admati and Martin Hellwig An edited version of the following text appeared as an op-ed in Financial Times, June 3, 2011. Full text version appeared online in "Martin Wolf's Economists' Forum," FT.com, June 6, 2011. Bankers on both sides of the Atlantic are lobbying furiously against...
STANFORD GRADUATE SCHOOL OF BUSINESS—How should companies price goods that they ship between their own divisions correlated companies? Internationally, that quandary confronts the producers of nearly half of all U.S. imported goods, a third of all U.S. exports, and a huge proportion of global...
STANFORD GRADUATE SCHOOL OF BUSINESS—For years, return on investment (ROI) and related financial accounting ratios have been widely used as key measures of business profitability. But what three accounting professors from the Stanford Graduate School of Business recently discovered was that,...
STANFORD GRADUATE SCHOOL OF BUSINESS—Data on intangibles such as customer satisfaction can yield significant forecasts of earnings only when they are analyzed in conjunction with financial statistics, according to recent research. Accounting Professor Madhav Rajan used a collection of wide-ranging...
Despite growing public skepticism over how useful financial statements are in providing information to investors, researchers at Stanford's Graduate School of Business have found that the value of financial ratios for predicting bankruptcy has not declined significantly over time. Professors...
STANFORD GRADUATE SCHOOL OF BUSINESS—Major accounting fraud aside, there are few business activities the news media seem to delight in exposing as much as excessive executive compensation. But recent research shows that these types of headlines might not make all that much difference in how...
STANFORD GRADUATE SCHOOL OF BUSINESS—In June finance ministers of the Group of 8, the world's wealthiest industrialized nations, agreed to cancel at least $40 billion in debt owed by the world's poorest nations, many of them in Africa. The move certainly sounds generous, but researchers caution it...
STANFORD GRADUATE SCHOOL OF BUSINESS — There's good news for supporters of the Waxman-Markey climate bill from Professor Stefan Reichelstein. Although passed by the U.S. House of Representatives in June 2009, the bill is expected to spur a contentious debate in the Senate starting this fall....
STANFORD GRADUATE SCHOOL OF BUSINESS—When Fox decided to make the movie Titanic, the studio called upon Paramount to put up $65 million to help finance the film in exchange for a portion of profits and movie rights. Fox covered its derriere by sharing risk for the picture through the co-financing...

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