Capital Structure, Precautionary Balances, and Valuation of the Firm: The Problem of Financial Risk

B-Tier
Journal: Journal of Financial and Quantitative Analysis
Year: 1970
Volume: 5
Issue: 1
Pages: 33-62

Authors (1)

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A useful distinction is sometimes maintained between business risk associated with uncertainty of receipts generated by a firm's assets and financial risk defined as the probability of incurring penalty costs stemming from liability claims on assets and asset yields. In fact, disagreement in recent literature on the exact role of capital structure in market valuation of business firms is easily interpreted once the risk assumptions of the literature such as perfect certainty, business risk, and financial risk have been identified.

Technical Details

RePEc Handle
repec:cup:jfinqa:v:5:y:1970:i:01:p:33-62_01
Journal Field
Finance
Author Count
1
Added to Database
2026-01-29