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So what this research intended to do was to basically use surveys uh
to determine what actual practice is and then relate it to the theories
so that we could determine which theories have more validity than others.
What the research found that I think was surprising in terms of how important this factor is
is that a lot of managerial decision making
is intended to reduce the incidents of disagreement.
That they are really making decisions that they believe will generate
less rather than more controversy where where the likelihood that a decision might not be endorsed
by a major stakeholder group
is relatively low and that does shape how they do acquisitions, how they decide on capital structure
how they decide on dividend policy and that's really not yet
a mainstream of uh research in finance.
What this finds is that
when you're thinking about capital structure, think not only about the tax benefits
of debt, but also think about how taking on more leverage
is going to impede your ability to make certain decisions
because of the potential for disagreement
with creditors that you may not have if you're less leverage.
So, it's those sorts of insights that you would not necessarily get
by looking at the existing body
of research and finance that I think are very useful for executives as they think about financial decisions.