Dirk Schoenmaker
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View article: Impact of Transitions on the Financial Stability and LOLR Roles of Central Banks
Impact of Transitions on the Financial Stability and LOLR Roles of Central Banks Open
Meeting net-zero targets poses a major challenge for companies. Some companies are able to adapt to the new low-carbon world, while others may fail to do so and thus risk turning into stranded assets. This chapter argues that central banks…
View article: Which discount rate for sustainability?
Which discount rate for sustainability? Open
There is a long-standing controversy about determining the discount rate at which companies should discount the long-term benefits of sustainability investments (e.g. for climate change mitigation and adaptation). While financial capital i…
View article: Liquidity and clientele effects in green debt markets
Liquidity and clientele effects in green debt markets Open
We jointly model green and regular bond markets. Green bonds can improve allocative efficiency and lower financing costs for green projects, but economies of scale, like liquidity fragmentation, may cause friction. Consequently, profitable…
View article: Decision Rules for Corporate Investment
Decision Rules for Corporate Investment Open
We investigate the decision rules for corporate investment by designing a company value frontier. This company value frontier allows for balancing the financial value and social and environmental impacts. This article develops novel value …
View article: Embracing the Brave New World: A Response to Demekas and Grippa
Embracing the Brave New World: A Response to Demekas and Grippa Open
In the article ‘Walking a Tightrope: Financial Regulation, Climate Change, and the Transition to a Low-Carbon Economy’ in the Journal of Financial Regulation, Demekas and Grippa (2022) argue that it is dangerous to give central banks and f…
View article: Why Corporate Sustainability Is Not Yet Measured
Why Corporate Sustainability Is Not Yet Measured Open
Measuring Corporate Sustainability (CS) has been identified as an important enabler for integrating sustainability into corporate practices. Different methodologies and frameworks for measuring CS have been developed in the literature with…
View article: Corporate Governance Beyond the Shareholder and Stakeholder Model
Corporate Governance Beyond the Shareholder and Stakeholder Model Open
Corporate Governance Beyond the Shareholder and Stakeholder Model There is a heated debate on shareholder versus stakeholder governance. The debate has expanded from traditional stakeholders who are directly involved with the company, such…
View article: Issues and Payouts: Changes in Capital Structure
Issues and Payouts: Changes in Capital Structure Open
Companies can change the composition of their capital structure by adding (issuing) or reducing (paying out) types of funding. In issues, cash is raised from providers of capital and their claim is increased accordingly. Conversely, payout…
View article: Investment Decision Rules
Investment Decision Rules Open
When making investment decisions, companies need to be able to compare various investment opportunities. Which ones offer the best value? The first sections of this chapter describe how companies can make such comparisons on a purely finan…
View article: The Company within Social and Planetary Boundaries
The Company within Social and Planetary Boundaries Open
Society faces multiple sustainability challenges. The transition towards a sustainable and inclusive economy requires rethinking and reorganising many current practices. Companies play an important role in that transition because social an…
View article: Reporting and Investor Relations
Reporting and Investor Relations Open
Financial reporting and investor relations serve important roles as a means of communication between corporate management and the company’s stakeholders, including investors. This chapter outlines why reporting matters, and how it falls sh…
View article: Capital Structure
Capital Structure Open
Capital structure is about the funding side of the company’s balance sheet and enables a better understanding of a company’s risk profile and health. We start from financial capital structure, which concerns the proportions of debt and equ…
View article: Corporate Governance
Corporate Governance Open
Corporate governance is about controlling and directing the company. The starting point is the objective of the company. In the shareholder model, the ultimate control is with shareholders, who usually aim to maximise company profits and t…
View article: Mergers and Acquisitions
Mergers and Acquisitions Open
Mergers and acquisitions (M&A) are very large investments in which a company absorbs another company, which can dramatically change the profile of a company’s assets. This chapter discuss various types of M&A and the motives behind them, a…
View article: Case Study Integrated Valuation: Inditex
Case Study Integrated Valuation: Inditex Open
This chapter applies the tools of the previous chapters to a particular company, Inditex, the largest fast fashion company in the world. The fast fashion industry faces major social (S) and environmental (E) challenges. Moreover, since the…
View article: Discount Rates and Scarcity of Capital
Discount Rates and Scarcity of Capital Open
Dealing with the future and determining the present value of future cash flows are key parts of corporate finance. The first section of this chapter therefore addresses discount rates and the time value of money. Subsequently, the determin…
View article: Cost of Capital
Cost of Capital Open
A company’s value is determined not just by its expected cash flows, but also by its cost of capital, which we explore in this chapter. We start with the cost of financial capital r FV , which is the required minimum return on financial ca…
View article: Valuing Private Equity
Valuing Private Equity Open
Private equity funds are set up to invest in private companies for a predefined multiyear period. Private equity companies, i.e. the companies that run private equity funds, come in several types, with different goals and methods. Private …
View article: Capital Budgeting
Capital Budgeting Open
In this chapter, we dive deeper into the capital budgeting process, which is the process of making a list of investment projects to be done. We make these investment decisions more tangible by presenting detailed calculation examples—inclu…
View article: Corporate Finance for Long-Term Value
Corporate Finance for Long-Term Value Open
This is an open access book..This textbook discusses sustainable development goals in finance and describes how firms can conduct sustainable business.