Finance & Investing · Corporate Finance
A topic within Corporate Finance, itself one of 11 topics in that field and part of Finance & Investing.
2 works
Michael C. Jensen
Argues that managers holding free cash flow beyond what profitable projects require tend to waste it on low-return acquisitions or empire-building, and that debt disciplines this by pre-committing cash to creditors.
Jeremy C. Stein
Models headquarters as a banker allocating scarce capital among divisions competing for funds, and argues this winner-picking is a genuine advantage of diversified firms over standalone companies that must raise capital externally.
link checked 17 Sept 2026