A Message from the Editor

In what might be called the first principle of modern corporate finance, the primary source and main driver of a company's long-run value is said to be its strategy and what finance academics refer as the corporate investment decision—in brief, what corporate managers choose to do with the capital their investors have entrusted them with. Having committed themselves to a strategy and business plan, and figured out the amount of capital required to carry out the plan, the managers are then assumed to address the financing decision: What's our targeted capital structure? Should it be mostly equity, with few (visible) strings attached; or should it include large amounts of debt, with its contractually fixed and obligatory payments of interest and principal?