When delegating an investment decisions to a professional manager, investors often anchor their mandate to a specific benchmark. The manager's exposure to risk is controlled by means of a tracking error volatility constraint. It depends on market conditions whether this constraint is easily met...

Despite a vast literature on the capital structure of the firm there still is a big gap between theory and practice. Starting with the seminal work by Modigliani amp; Miller, much attention has been paid to the optimality of capital structure from the shareholders' point of view. Over the last...