Determinants of Corporate Borrowing

Myers, S. C. (1977). Determinants of Corporate Borrowing. Journal of Financial Economics, 5(2), 147-175.

Type

Journal article

Intellectual base

Primary research

Year

1977

Volume

5

Issue

2

Pages

147-175

ISSN

0304-405X

DOI

10.1016/0304-405x(77)90015-0

DOI registrant

Elsevier

Link

https://doi.org/10.1016/0304-405X(77)90015-0

Cited from

economics_finance

Cited by

2 citations across 2 artifacts.

Each citation links to the sentence it supports in the citing article.

Primes

• Optionality
  • Optionality clarifies this distinction and highlights the premium (pilot cost, delay, added complexity) versus the upside (preserved future choices if conditions warrant), echoing Myers's (1977) original framing of corporate growth opportunities as call options on future investment.

    This sourceOriginates the "real options" framing of corporate growth opportunities as call options on discretionary future investment; distinguishes assets-in-place (committed resources) from option-like growth opportunities (preserved optionality).

    Supported in partVerified against the work's full text

    Myers's own text frames real assets as call options on further discretionary investment, which backs the claim's 'echoing Myers' attribution but not its premium-versus-upside framing of optionality.

    “Thus the most fundamental distinction is not between "growth oppor- tunities" and "assets in place," but between (1) assets that can be regarded as call options, in the sense that their ultimate values depend, at least in part, on further discretionary investment by the firm and (2) assets whose ultimate value does not depend on further discretionary investment.”

    Read by an automated reader; not a human review. How support was checked

Mechanisms

• Real Options Contract
  • This is the literal origin of the real options idea — applying financial-option logic to real decisions, where the right to invest later has quantifiable value under uncertainty.

    This sourceTreats growth opportunities as call options whose value depends on discretionary future investment.

Verification

Does it exist? Confirmed. This work's DOI resolves to a registered record, which fixes its identity. That is all it fixes.

Does it back the claim? Read against the text for 1 of 2 citations: 1 supported in part. Each verdict is shown under its citation below, with what in the work backs the sentence.

Support is checked per citation rather than per work — the same source can be cited soundly in one article and wrongly in another. Per-citation recording began recently, so a citation with no recorded check is a gap in the record rather than evidence it went unchecked.

See how references were verified.

Registry ID ref:71388bb6ec7e · see in the full table