Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195498 
Year of Publication: 
2017
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 11 [Issue:] 4 [Publisher:] University of Finance and Management in Warsaw, Faculty of Management and Finance [Place:] Warsaw [Year:] 2017 [Pages:] 369-382
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
Corporate financial economic programs are almost universally featured in economics and management degrees and, therefore, are an essential component of the culture-building process for current and future economists and managers. Nevertheless, these programs are not restricted to financial affairs. A survey of contemporary academic textbooks in corporate financial economics shows that these books are based on promoting Irving Fisher's (1906) specific theory of the organization, which advocates that organizations exist to create wealth for their owners/shareholders. This theory has three key premises. 1) The 'correct' equity/stock prices are equal to future cash flows that are payable to the organizations' owners/shareholders. 2) The purpose of the firm and its managers is to maximize the value of the equity/share prices. c) Hence, their purpose is to maximize the cash flows (wealth) payable to owners/shareholders. None of these premises has been clearly demonstrated empirically. Yet, economic and business schools deliver lectures based on this rhetoric every year to thousands of students who will later hold influential roles in society.
Subjects: 
financialisation
financial economics
finance
Irving Fisher
textbook
economic sociology
JEL: 
A11
A12
A13
B26
G
D2
G3
L2
M2
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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