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Intro -- Preface -- Contents -- About the Authors -- Chapter 1: Introduction -- 1.1 Introduction -- References -- Part I: Corporate Finance -- Chapter 2: Capital Structure Theory: Past, Present, Future -- 2.1 Introduction -- 2.2 Basic Theories of Capital Structure -- 2.2.1 A Historical Point of View -- 2.2.2 The Empirical (Traditional) Approach -- 2.2.3 The Modigliani-Miller Theory -- 2.2.3.1 The Modigliani-Miller Theory with Taxes -- 2.2.3.2 The Modigliani-Miller Theory with Taxes -- 2.2.4 Modifications of Modigliani-Miller Theory -- 2.2.4.1 Hamada Model -- 2.2.4.2 The Cost of Capital Under Risky Debt -- 2.2.4.3 The Account of Corporate and Individual Taxes (Miller Model) -- 2.2.4.4 Alternative Expression for WACC -- 2.2.4.5 The Miles-Ezzell Model Versus the Modigliani-Miller Theory -- 2.3 Trade-Off Theory -- 2.3.1 Static Theory -- 2.3.2 Dynamic Theory -- 2.3.3 Proof of the Bankruptcy of the Trade-Off Theory -- 2.4 Accounting for Transaction Costs -- 2.5 Accounting for Asymmetries of Information -- 2.6 Signaling Theory -- 2.7 Pecking Order Theory -- 2.8 Behavioral Theories -- 2.8.1 Manager Investment Autonomy -- 2.8.2 The Equity Market Timing Theory -- 2.8.3 Information Cascades -- 2.9 Theories of Conflict of Interests -- 2.9.1 Theory of Agency Costs -- 2.9.2 Theory of Corporate Control and Costs Monitoring -- 2.9.3 Theory of Stakeholders -- 2.10 BFO Theory -- 2.10.1 Brusov-Filatova-Orekhova Theorem -- 2.11 BFO Theory and Modigliani-Miller Theory Under Inflation -- 2.12 BFO Theory for the Companies Ceased to Exist at the Time Moment n (BFO-2 Theory) -- 2.13 The Modigliani-Miller Theory with Advance Payments of Tax on Profit -- 2.14 The Modigliani-Miller Theory with Arbitrary Frequency of Payment of Tax on Profit -- 2.15 Generalization of the Modigliani-Miller Theory for the Case of Variable Profit.

The book introduces and discusses the modern theory of the cost of capital and capital structure - the BFO theory (Brusov-Filatova-Orekhova theory), which is valid for companies of arbitrary age and which replaced the theory of Nobel laureates Modigliani and Miller. The theory takes into account the conditions faced by companies operating in the real economy, such as revenue fluctuations; the arbitrary frequency of tax on profit payments (monthly, quarterly, semi-annual or annual payments), both for advance income tax payments and for payments at the end of the respective period; and the arbitrary frequency of interest on loans payments. The impact of these conditions on the company value, on the cost of raising capital, on the company's dividend policy and managerial decisions are discussed. The book subsequently develops new applications of the BFO theory in several areas such as corporate finance, corporate governance, investments, taxation, business valuations and ratings.

Introduction -- The Importance of Rating and the Disadvantages of Existing Rating Systems -- Part I Corporate Finance Theories used in Ratings and in Rating Methodologies -- Modern Theory of Capital Cost and Capital Structure: Brusov–Filatova–Orekhova Theory (BFO Theory) -- Modification of the Modigliani–Miller theory for the case of advance tax on profit payments -- Modern Theory of Capital Cost and Capital Structure: Brusov–Filatova–Orekhova Theory (BFO Theory) -- Part II Ratings and Rating Methodologies of Non–financial Issuers -- Application of the Modigliani–Miller Theory in Rating Methodology -- Application of the Modigliani–Miller Theory, Modified For the Case of Advance Payments of Tax on Profit, in Rating Methodologies -- Application of Brusov–Filatova–Orekhova theory (BFO theory) in Rating Methodology -- Part III Project Ratings -- Investment Models with Debt Repayment at the End of the Project and Their Application -- Investment Models with Uniform Debt Repayment and Their Application -- A New Approach to Ratings of the Long–Term Projects -- Ratings of the Investment Projects of Arbitrary Durations: New Methodology -- Ratings of Investment Projects of Arbitrary Duration with a Uniform Debt Repayment: a new approach -- Part IV New Meaningful Effects in Modern Capital Structure Theory (BFO Theory) Which Should be Accounting in Rating Methodologies -- The Golden Age of the Company (Three Colors of Company's Time) -- A "silver age" of the Companies. Conditions of existence of "golden age" and "silver age"effects` -- Inflation in Brusov–Filatova–Orekhova Theory and in Its Perpetuity Limit–Modigliani–Miller Theory -- A Qualitatively New Effect in Corporate Finance: Abnormal Dependence of Equity Cost of Company on Leverage Level -- The Impact of Taxing and Leverage in Evaluation of Capital Cost, Capitalization of the Company and Issued Ratings -- Recommendations to international rating agencies (Big Three (Standard & Poor's, Fitch and Moody's), European) and national ones (ACRA, Chinese etc.) -- Conclusions.

AbstractAs climate change increases the probability and severity of natural hazards, the need for coordinated adaptation at all levels of society intensifies. Governmental‐level adaptation measures are essential, but insufficient in the face of growing risks, necessitating complementary action from households. Apprehending the drivers of household adaptation is critical if governments are to stimulate protective behavior effectively. While past work has focused on the behavioral drivers of household adaptation, little attention has been paid to understanding the relationships between adaptation measures themselves—both previously undergone and additionally (planned) intended adaptation(s). Using survey data (N = 4,688) from four countries—the United States, China, Indonesia, and the Netherlands—we utilize protection motivation theory to account for the behavioral drivers of household adaptation to the most devastating climate‐driven hazard: flooding. We analyze how past and additionally intended adaptations involving structural modification to one's home affect household behavior. We find that both prior adaptations and additionally intended adaptation have a positive effect on intending a specific adaptation. Further, we note that once links between adaptations are accounted for, the effect that worry has on motivating specific actions, substantially lessens. This suggests that while threat appraisal is important in initially determining if households intend to adapt, it is households' adaptive capacity that determines how. Our analysis reveals that household structural modifications may be nonmarginal. This could indicate that past action and intention to pursue one action trigger intentions for other adaptations, a finding with implications for estimating the speed and scope of household adaptation diffusion.

Understanding social and behavioral drivers and constraints of household adaptation is essential to effectively address increasing climate-induced risks. Factors shaping household adaptation are commonly treated as universal; despite an emerging understanding that adaptations are shaped by social, institutional, and cultural contexts. Using original surveys in the United States, China, Indonesia, and the Netherlands (N=3,789) - we explore variations in factors shaping households' adaptations to flooding, the costliest hazard worldwide. We find that social influence, worry, climate change beliefs, self-efficacy, and perceived costs exhibit universal effects on household adaptations, despite countries' differences. Disparities occur in the effects of response efficacy, flood experience, beliefs in governmental actions, demographics, and media, which we attribute to specific cultural or institutional characteristics. Climate adaptation policies can leverage on the revealed similarities when extrapolating best practices across countries, yet should exercise caution as context-specific socio-behavioral drivers may discourage or even reverse household adaptation motivation.

This monograph is devoted to a modern theory of capital cost and capital structure created by this book's authors, called the Brusov-Filatova-Orekhova (BFO) theory, and its application to the real economy. BFO theory promises to replace the traditional theory of capital cost and capital structure by Nobel laureates Modigliani and Miller. This new theory in particular, presents a possible explanation to the causes of the recent global financial crisis. The authors of the book describe the general theory of capital cost and capital structure that can be applied to corporations of arbitrary age (or with arbitrary lifetime) and investment projects with arbitrary duration. The authors illustrate their theory with examples from corporate practice and develop investment models that can be applied by companies in their financial operations. This updated second edition includes new chapters devoted to the application of the BFO theory in ratings, banking and other areas. The authors also provide a new approach to rating methodology highlighting the need for including financial flow discounting, the incorporation of rating parameters (in particular, financial ratios) into the modern theory of capital structure - BFO theory. This book aims to change our understanding of corporate finance, investments, taxation and rating procedures. The authors emphasize that the most used principles of financial management should be changed in accordance to BFO theory.--