Behavioral Corporate Finance

Topics on behavioral corporate finance are concerned with the consequences ofboundedly rational investors for optimal financial decisions by firm management. Aspects ofbounded rationality are relevant both for the theory and the practice of corporate finance. Onthe one hand, a new kind of financial transformation function is established, and other finan-cial functions, in particular the signalling function, have to be reconsidered as well when al-lowing for investors bounded rationality. On the other hand, quantitatively founded recom-mendations for practical financial decision-making may be derived applying the concepts ofbehavioral corporate finance.