THE THEORY AND PRACTICE OF FINANCE IN THE 1990S

This study is focused around a survey of corporate finance executives. Its purposes were to look at conflicts or inconsistencies between what is written in finance literature and practices within the industry, to address issues not considered in prior surveys, as well as the trend of financial executives in responding to surveys, to understand the changes that have occurred in the use of capital budgeting tools, and finally to tie the various issues of corporate finance together in one survey. Prior surveys have generally covered only one issue, such as capital budgeting. The response rate to the survey is one of the highest found in recent studies and much is added to our knowledge about what executives do and how their behavior parallels the shareholder wealth maximization model and what is written in textbooks.