The Journal of Finance publishes leading research across all the major fields of finance. It is one of the most widely cited journals in academic finance, and in all of economics. Each of the six issues per year reaches over 8,000 academics, finance professionals, libraries, and government and financial institutions around the world. The journal is the official publication of The American Finance Association, the premier academic organization devoted to the study and promotion of knowledge about financial economics.
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DISCUSSION
Published: 05/01/1973 | DOI: 10.1111/j.1540-6261.1973.tb01774.x
Myron S. Scholes
Stock and Compensation*
Published: 07/01/1991 | DOI: 10.1111/j.1540-6261.1991.tb03766.x
MYRON S. SCHOLES
Compensation planning within firms creates important corporate financial problems. Theoretical models and empirical tests of hypotheses in this area should play a much larger role than currently in the modern theory of corporate finance. Employees fund a large proportion of their firm's activities through deferred compensation arrangements tied to the performance of their company. These arrangements are generally put in place for incentive reasons, to align the interests of employees more closely with those of shareholders. Moreover, tax rules encourage or discourage these arrangements at various times. Currently, both tax rules and incentive considerations encourage stock buyback programs to fund deferred compensation arrangements. Prior to the 1980s, however, tax rules favored funding in other than company stock, implying that employees likely held company stock for incentive and not for tax reasons during this time period.
TAXES AND THE PRICING OF OPTIONS
Published: 05/01/1976 | DOI: 10.1111/j.1540-6261.1976.tb01889.x
Fischer Black, Myron Scholes
Fischer Black
Published: 12/01/1995 | DOI: 10.1111/j.1540-6261.1995.tb05181.x
Robert C. Merton, Myron S. Scholes
Session Topic: Individual Investors and Mutual Funds
Published: 05/01/1974 | DOI: 10.1111/j.1540-6261.1974.tb03054.x
Jack L. Treynor, Fischer Black, Myron Scholes
Summary. The modern theory of finance suggests that most investors should put part or all of their money into a “market portfolio” mixed with borrowing or lending. Empirical evidence generally supports the theory, but there are some unanswered questions about the composition of the best market portfolio, about the apparent attractiveness of low risk stocks relative to high risk stocks, and about ways of minimizing transaction costs. Attempts to create a fund based on these principles and to make it available to a large number of investors have uncovered some important problems. Legal costs due to government regulation, the costs of managing a fund, and especially the costs of selling it are all much higher than one might expect. Despite these problems, efforts to create such funds seem destined for eventual success.