2022
DOI: 10.3390/jrfm15090399
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Paradigm Shift in Finance: The Transformation of the Theory from Perfect to Imperfect Capital Markets Using the Example of Company Valuation

Abstract: In the capital market and financing theory, we are currently observing major upheavals. For decades, the neoclassical paradigm has dominated in science and practice. Triggered by economic and political crises, transformations, the COVID-19 pandemic, and political instabilities, a paradigm shift is currently occurring in finance. This paradigm shift leads to models and theories that can explain imperfections in capital markets and provide decision support for managers. The aim of this article is to analyse the … Show more

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Cited by 5 publications
(2 citation statements)
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“…Traditionally, the management's targets flow into corporate planning. More modern approaches, however, rely on simulation-based corporate planning, which does not process target values (e.g., values set by the management) in the planning but generates stochastic plan values from the risks of the company through simulation (Ernst and Gleißner 2022a). The resulting plan values represent the average value over all scenarios generated by the simulation.…”
Section: Simulation-based Corporate Planningmentioning
confidence: 99%
See 1 more Smart Citation
“…Traditionally, the management's targets flow into corporate planning. More modern approaches, however, rely on simulation-based corporate planning, which does not process target values (e.g., values set by the management) in the planning but generates stochastic plan values from the risks of the company through simulation (Ernst and Gleißner 2022a). The resulting plan values represent the average value over all scenarios generated by the simulation.…”
Section: Simulation-based Corporate Planningmentioning
confidence: 99%
“…The distribution of the target variable allows a quantitative risk analysis. (Ernst and Gleißner 2022a).…”
Section: Introductionmentioning
confidence: 99%