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Optimal Equity and Financing Model of Krouse and Lee: Corrections and Extensions

Published online by Cambridge University Press:  06 April 2009

Suresh P. Sethi
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Extract

Krouse and Lee [5] have formulated an optimal financing problem of a firm in the dynamic setting of optimal control theory. Specifically, the problem is to find a financing mix of retained earnings and external equity over time in a way that maximizes the present value of the entire future dividends stream accruing to the firm's initial stockholders subject to a given maximum allowable growth rate for the firm.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 13 , Issue 3 , September 1978 , pp. 487 - 505
Copyright
Copyright © School of Business Administration, University of Washington 1978

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References

REFERENCES

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