Corporate finance theories. Challenges and trajectories
AbstractThe aim of this paper is to examine the evolution of corporate finance theories in order to outline already established and future trajectories. Compared with the earliest theories developed in the field (which mainly focused on the capital structure irrelevance), specialist literature has been enriched with wide-ranging debates on identifying the implications of financial decisions on the firm’s value, corporate governance, market strategies, etc. The existing body of theories on corporate finance has provided analytical frameworks vital for grounding, understanding and implementing firms’ capital structure policies. However, the theories developed have certain limitations, which pose challenges for further research. After a brief description of the main theories developed in the field, the study presents the drivers that prompted various researches in the area of firms’ financing. The study suggests that the evolution of corporate finance theories bears the mark of the dominant trend in contemporary science – designing new theories that overturn tradition.
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Bibliographic InfoArticle provided by Economic Publishing House in its journal Management & Marketing.
Volume (Year): 7 (2012)
Issue (Month): 2 (Summer)
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capital structure; corporate finance theories; trade-off theory; pecking order theory; agency theory; capital structure and factorproduct markets; market timing theory.;
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