The Journal of Finance

What is the Intrinsic Value of the Dow?

Published: 10/1999,  Volume: 54,  Issue: 5  |  DOI: 10.1111/0022-1082.00164  |  Cited by: 502

Charles M. C. Lee, James Myers, Bhaskaran Swaminathan

We model the time‐series relation between price and intrinsic value as a cointegrated system, so that price and value are long‐term convergent. In this framework, we compare the performance of alternative estimates of intrinsic value for the Dow 30 stocks. During 1963–1996, traditional market multiples (e.g., B/P, E/P, and D/P ratios) have little predictive power. However, a V/P ratio, where V is based on a residual income valuation model, has statistically reliable predictive power. Further analysis shows time‐varying interest rates and analyst forecasts are important to the success of V. Alternative forecast horizons and risk premia are less important.

The Capital Structure Puzzle

Published: 7/1984,  Volume: 39,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1984.tb03646.x  |  Cited by: 2056

STEWART C. MYERS

THE CONTROL OF CONSUMER CREDIT IN AUSTRALIA

Published: 9/1961,  Volume: 16,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1961.tb02838.x  |  Cited by: 2

Margaret G. Myers

DISCUSSION

Published: 5/1971,  Volume: 26,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1971.tb00913.x  |  Cited by: 5

Stewart C. Myers

EFFECTS OF UNCERTAINTY ON THE VALUATION OF SECURITIES AND THE FINANCIAL DECISIONS OF THE FIRM*

Published: 3/1968,  Volume: 23,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1968.tb03014.x  |  Cited by: 0

Stewart Clay Myers

Outside Equity

Published: 6/2000,  Volume: 55,  Issue: 3  |  DOI: 10.1111/0022-1082.00239  |  Cited by: 307

Stewart C. Myers

Equity financing is modeled when cash flows and asset values are not verifiable. Investors have enforceable property rights to the firm's assets, but cannot prevent insiders (managers or entrepreneurs) from capturing cash flow. Insiders must coinvest and pay in each period a dividend sufficient to ensure outside investors' participation for at least one more period. Intervention by the investors must be limited by an agreement with insiders or by costs of collective action. Basic models are extended to show why firms go public and why agency costs necessarily arise when the act of investment is not immediately verifiable.

DISCUSSION

Published: 5/1982,  Volume: 37,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1982.tb00883.x  |  Cited by: 1

S. C. MYERS

A NOTE ON LINEAR PROGRAMMING AND CAPITAL BUDGETING

Published: 3/1972,  Volume: 27,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1972.tb00622.x  |  Cited by: 18

Stewart C. Myers

INTERACTIONS OF CORPORATE FINANCING AND INVESTMENT DECISIONS—IMPLICATIONS FOR CAPITAL BUDGETING

Published: 3/1974,  Volume: 29,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1974.tb00021.x  |  Cited by: 359

Stewart C. Myers

Subjective Cash Flow and Discount Rate Expectations

Published: 3/11/2021,  Volume: 76,  Issue: 3  |  DOI: 10.1111/jofi.13016  |  Cited by: 189

RICARDO DELAO, SEAN MYERS

Why do stock prices vary? Using survey forecasts, we find that cash flow growth expectations explain most movements in the S&P 500 price‐dividend and price‐earnings ratios, accounting for at least 93% and 63% of their variation. These expectations comove strongly with price ratios, even when price ratios do not predict future cash flow growth. In comparison, return expectations have low volatility and small comovement with price ratios. Short‐term, rather than long‐term, expectations account for most price ratio variation. We propose an asset pricing model with beliefs about earnings growth reversal that accurately replicates these cash flow growth expectations and dynamics.

REPLY

Published: 3/1977,  Volume: 32,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1977.tb03259.x  |  Cited by: 1

Stewar T. C. Myers

MEASURING ALLOCATIVE EFFICIENCY WITH TECHNOLOGICAL UNCERTAINTY

Published: 5/1976,  Volume: 31,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1976.tb01914.x  |  Cited by: 0

Stewart Myers, Clement G. Krouse

CONCEPTUAL PROBLEMS IN THE USE OF RISK‐ADJUSTED DISCOUNT RATES*

Published: 12/1966,  Volume: 21,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1966.tb00277.x  |  Cited by: 48

Alexander A. Robichek, Stewart C. Myers

A PROGRAMMING APPROACH TO CORPORATE FINANCIAL MANAGEMENT

Published: 5/1974,  Volume: 29,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1974.tb03072.x  |  Cited by: 47

STEWART C. MYERS, GERALD A. POGUE

A Theory of Takeovers and Disinvestment

Published: 3/20/2007,  Volume: 62,  Issue: 2  |  DOI: 10.1111/j.1540-6261.2007.01224.x  |  Cited by: 111

BART M. LAMBRECHT, STEWART C. MYERS

We present a real‐options model of takeovers and disinvestment in declining industries. As product demand declines, a first‐best closure level is reached, where overall value is maximized by closing the firm and releasing its capital to investors. Absent takeovers, managers of underleveraged firms always close too late, although golden parachutes may accelerate closure. We analyze the effects of takeovers of under‐leveraged firms. Takeovers by raiders enforce first‐best closure. Hostile takeovers by other firms occur either at the first‐best closure point or too early. Closure in management buyouts and mergers of equals happens inefficiently late.

CAPITAL BUDGETING AND THE CAPITAL ASSET PRICING MODEL: GOOD NEWS AND BAD NEWS

Published: 5/1977,  Volume: 32,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1977.tb03272.x  |  Cited by: 263

Stewart C. Myers, Stuart M. Turnbull

A Lintner Model of Payout and Managerial Rents

Published: 9/12/2012,  Volume: 67,  Issue: 5  |  DOI: 10.1111/j.1540-6261.2012.01772.x  |  Cited by: 196

BART M. LAMBRECHT, STEWART C. MYERS

We develop a dynamic agency model in which payout, investment, and financing decisions are made by managers who attempt to maximize the rents they take from the firm, subject to a capital market constraint. Managers smooth payout to smooth their flow of rents. Total payout (dividends plus net repurchases) follows Lintner's (1956) target adjustment model. Payout smooths out transitory shocks to current income and adjusts gradually to changes in permanent income. Smoothing is accomplished by borrowing or lending. Payout is not cut back to finance capital investment. Risk aversion causes managers to underinvest, but habit formation mitigates the degree of underinvestment.

VALUATION OF THE FIRM: EFFECTS OF UNCERTAINTY IN A MARKET CONTEXT

Published: 5/1966,  Volume: 21,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1966.tb00222.x  |  Cited by: 33

Alexander A. Robichek, Stewart C. Myers

TERM STRUCTURE WITH UNCERTAIN INFLATION

Published: 5/1977,  Volume: 32,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1977.tb03268.x  |  Cited by: 2

Stewart C. Myers, Richard Brealey, Stephen Schaefer

VALUATION OF FINANCIAL LEASE CONTRACTS

Published: 6/1976,  Volume: 31,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1976.tb01924.x  |  Cited by: 198

Stewart C. Myers, David A. Dill, Alberto J. Bautista

The Internal Governance of Firms

Published: 5/23/2011,  Volume: 66,  Issue: 3  |  DOI: 10.1111/j.1540-6261.2011.01649.x  |  Cited by: 299

VIRAL V. ACHARYA, STEWART C. MYERS, RAGHURAM G. RAJAN

We develop a model of internal governance where the self‐serving actions of top management are limited by the potential reaction of subordinates. Internal governance can mitigate agency problems and ensure that firms have substantial value, even with little or no external governance by investors. External governance, even if crude and uninformed, can complement internal governance and improve efficiency. This leads to a theory of investment and dividend policy, in which dividends are paid by self‐interested CEOs to maintain a balance between internal and external control.

DISCUSSION

Published: 5/1975,  Volume: 30,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1975.tb01821.x  |  Cited by: 0

M. J. Brennan, Willard T. Carleton, Stewart C. Myers

IS THE “NEUTRALIZED MONEY STOCK” UNBIASED?*: COMMENT

Published: 12/1976,  Volume: 31,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1976.tb03231.x  |  Cited by: 0

James R. Barth, James T. Bennett

The Effect of Voluntary Spin‐off Announcements on Shareholder Wealth

Published: 12/1983,  Volume: 38,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1983.tb03843.x  |  Cited by: 174

JAMES A. MILES, JAMES D. ROSENFELD

This paper presents estimates of the effect of a voluntary spin‐off announcement on shareholder wealth. The results show that spin‐off announcements have a positive influence on stock prices and that the relative increase in share price is greater for large spin‐offs than for small ones.

BOOKS RECEIVED

Published: 12/1963,  Volume: 18,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1963.tb01647.x  |  Cited by: 0

James Gillies

BOOKS RECEIVED

Published: 3/1962,  Volume: 17,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1962.tb04263.x  |  Cited by: 0

James Gillies

The Losses Realized in Bank Failures

Published: 9/1991,  Volume: 46,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1991.tb04616.x  |  Cited by: 303

CHRISTOPHER JAMES

This paper examines the losses realized in bank failures. Losses are measured as the difference between the book value of assets and the recovery value net of the direct expenses associated with the failure. I find the loss on assets is substantial, averaging 30 percent of the failed bank's assets. Direct expenses associated with bank closures average 10 percent of assets. An empirical analysis of the determinants of these losses reveals a significant difference in the value of assets retained by the FDIC and similar assets assumed by acquiring banks.

SOME FINANCIAL ASPECTS OF THE CANADIAN GOVERNMENT HOUSING PROGRAM: HISTORY AND PROSPECTIVE DEVELOPMENTS*

Published: 3/1953,  Volume: 8,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1953.tb01133.x  |  Cited by: 0

James Gillies

DOMESTIC POLICY OBJECTIVES AND THE BALANCE OF PAYMENTS

Published: 5/1966,  Volume: 21,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1966.tb00234.x  |  Cited by: 3

James Duesenberry

Bank Debt Restructurings and the Composition of Exchange Offers in Financial Distress

Published: 6/1996,  Volume: 51,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1996.tb02700.x  |  Cited by: 68

CHRISTOPHER JAMES

This article examines the relation between bank debt forgiveness and the structure of public debt exchange offers in financial distress. I find that the structure of exchange offers and the likelihood of an offer's success are significantly related to whether the bank participates in the restructuring transaction. Exchange offers made in conjunction with bank concessions are characterized by significantly greater reductions in public debt outstanding and significantly less senior debt offered to bondholders. Overall, the results suggest that the structure of a firm's public and private claims significantly affects the firm's ability to modify its capital structure in financial distress.

Relationship‐Specific Assets and the Pricing of Underwriter Services

Published: 12/1992,  Volume: 47,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1992.tb04686.x  |  Cited by: 98

CHRISTOPHER JAMES

This paper investigates the effect of setup costs on the pricing of investment banking services. The existence of setup costs is predicted to result in lower underwriter spreads in IPOs for firms that are expected to issue again. Consistent with this prediction, I find significantly lower spreads for firms that make subsequent issues. I also find that a firm's likelihood of changing underwriters in a subsequent offer is related to the time between offerings and the underwriter's pricing performance in the IPO. These results suggest that the deviations from optimal IPO pricing carry a penalty for the underwriter.

THE BURDEN OF THE PUBLIC DEBT: A REVIEW ARTICLE

Published: 12/1965,  Volume: 20,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1965.tb02936.x  |  Cited by: 16

James Tobin

BOOKS RECEIVED

Published: 12/1961,  Volume: 16,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1961.tb04243.x  |  Cited by: 0

James Gillies

BOOKS RECEIVED

Published: 3/1963,  Volume: 18,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1963.tb01633.x  |  Cited by: 0

James Gillies

The Effect of Common‐Stock Dividend Reductions on the Returns of Nonconvertible Preferred Stocks: A Note

Published: 6/1983,  Volume: 38,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1983.tb02517.x  |  Cited by: 2

JAMES ROSENFELD

An Analysis of Bank Loan Rate Indexation

Published: 6/1982,  Volume: 37,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1982.tb02225.x  |  Cited by: 13

CHRISTOPHER JAMES

This paper examines the economic rationale for the use of bank loan commitments and the effect on the allocation of bank credit of indexing the loan rate offered through the commitment to the prime. A simple model of the loan market is constructed and used to examine the effect changes in loan demand and the cost of bank funds have on the allocation of bank credit under indexation. It is shown that indexing implies changes in the relative cost of borrowing for certain groups of bank customers. For nonprime customers, an increase in the cost of bank funds results in a decline in the relative cost of borrowing under commitments. The pattern of commitment use is found to be consistent with the predictions of the model.

BOOKS RECEIVED

Published: 9/1962,  Volume: 17,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1962.tb04331.x  |  Cited by: 0

James Gillies

REPLY

Published: 9/1966,  Volume: 21,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1966.tb00257.x  |  Cited by: 0

James Tobin

Agency Costs and Ownership Structure

Published: 2/2000,  Volume: 55,  Issue: 1  |  DOI: 10.1111/0022-1082.00201  |  Cited by: 1855

James S. Ang, Rebel A. Cole, James Wuh Lin

We provide measures of absolute and relative equity agency costs for corporations under different ownership and management structures. Our base case is Jensen and Meckling's (1976) zero agency‐cost firm, where the manager is the firm's sole shareholder. We utilize a sample of 1,708 small corporations from the FRB/NSSBF database and find that agency costs (i) are significantly higher when an outsider rather than an insider manages the firm; (ii) are inversely related to the manager's ownership share; (iii) increase with the number of nonmanager shareholders, and (iv) to a lesser extent, are lower with greater monitoring by banks.

THE TWO FACES OF BOND REFUNDING

Published: 6/1975,  Volume: 30,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1975.tb01856.x  |  Cited by: 9

James S. Ang

THE DEVELOPMENT OF A GENERAL QUASI‐REORGANIZATION CONCEPT*

Published: 9/1956,  Volume: 11,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1956.tb00113.x  |  Cited by: 0

James S. Schindler

PROCESS OF ECONOMIC ADAPTATION IN A WORLD WAR II NEUTRAL: A CASE STUDY OF SWEDEN*

Published: 9/1961,  Volume: 16,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1961.tb02841.x  |  Cited by: 0

Daniel James Edwards

THE REPETITIVE BIDDING PROCESS IN MUNICIPAL BOND UNDERWRITING, A CHANCE‐CONSTRAINED PROGRAMMING APPROACH*

Published: 9/1974,  Volume: 29,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1974.tb03112.x  |  Cited by: 0

James Michael Kelly

DISCUSSION

Published: 5/1976,  Volume: 31,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1976.tb01884.x  |  Cited by: 0

James L. Bicksler

A MODEL OF STATE AND LOCAL GOVERNMENT PORTFOLIO AND REAL‐EXPENDITURE BEHAVIOR: 1952–1965*

Published: 6/1970,  Volume: 25,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1970.tb00538.x  |  Cited by: 0

James A. Chalmers

THE EQUAL CREDIT OPPORTUNITY ACT OF 1974: A COST/BENEFIT ANALYSIS

Published: 5/1977,  Volume: 32,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1977.tb03298.x  |  Cited by: 9

James F. Smith

Theory and Behavior of Multiple Unit Discriminative Auctions

Published: 9/1984,  Volume: 39,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1984.tb03888.x  |  Cited by: 44

JAMES C. COX, VERNON L. SMITH, JAMES M. WALKER

This paper reports the results of controlled experiments designed to test the Harris‐Raviv generalization of the Vickrey theory of bidding in multiple unit discriminative auctions. The paper also discusses further development of the theory—in a way suggested by the experimental results—to include bidders with distinct risk preferences.

A SPECTRAL ANALYSIS OF CYCLICAL FLUCTUATIONS IN MONEY AND BUSINESS*

Published: 9/1971,  Volume: 26,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1971.tb00938.x  |  Cited by: 0

James T. Bennett

Investment Risk, Bankruptcy Risk, and Pension Reform in Canada

Published: 6/1982,  Volume: 37,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1982.tb02220.x  |  Cited by: 5

JAMES E. PESANDO

The wealth redistributive effects of retroactive termination insurance together with the difficulty of determining insurance premiums suggest that an alternative response, such as improved disclosure of worker benefits in the event of plan wind‐up, may be preferred if the government remains concerned about the security of benefits in underfunded plans. Members of money purchase plans may well be less subject to investment risk than members of defined benefit plans, contrary to the claim of many. In Canada, defined benefit plans appear to have been transformed into defined benefit/money purchase hybrids, and this has several important implications.

ON CORPORATE DEBT MATURITY STRATEGIES

Published: 3/1976,  Volume: 31,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1976.tb03193.x  |  Cited by: 187

James R. Morris