One of the perks of reaching the end of a long career in the academy is that you develop an appreciation for how the body of knowledge in your discipline evolves over time. What many of us come to realize that progress can it be painfully slow and at times circuitous. In fact, it is often the...

Collateralized Loan Obligations (CLOs) are now the largest nonbank lender in the U.S. This added source of financing, which lies outside the purview of banking regulation, is part of the “shadow banking system.” Lack of transparency and regulatory oversight of CLOs have given rise to the...

In 1975 I co-authored a paper that documented the influence of industry on corporate capital structure with my colleague Dave Scott. By current standards our study was based on an exceedingly small sample and an unsophisticated research design. However, at the time the paper helped solidify the...

In this paper, we lay out theoretical shortcomings of the IRR criteria that have largely dropped out of the finance literature. We discuss the problem of multiple IRRs and non-existent IRR under a new light. We also discuss the financial ambiguity that can arise when interpreting the IRR. Then,...

The mistaken notion that the internal rate of return (IRR) and net present value (NPV) contain reinvestment rate assumptions lingers in teaching materials and corporate practice. The fact is that there are no reinvestment rate assumptions built into, or implicit to, the computation and use of...

The typical payday loan is for less than $500, has a maturity of two weeks, is secured by the borrower's post-dated check or debit authorization, and carries a compound annual rate of interest that can easily exceed 10,000 percent. If you imagined the terms of illegal loan sharking you may not...

The mistaken notion that the internal rate of return (IRR) and net present value (NPV) have required reinvestment rate assumptions built into them was debunked long ago in the academic finance literature. There are no reinvestment rate assumptions built into, or implicit to, the computation and...

Management controls the issuing and repurchasing of securities, but they have no direct control over leverage changes stemming from changes in stock price or from profits and losses. By separating managed from unmanaged changes in leverage ratios, we draw three basic conclusions: 1) management...

Our objective in writing this paper is to share what we have learned about the promise of wind energy and its potential contribution to a comprehensive solution to the long-term energy needs of the U.S. economy. The immediate impetus for our interest came out of a meeting with famed oilman and...