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Keywords:

  • Corporate finance;
  • Executive decisions;
  • Extended case method;
  • Risk management;
  • Corporate social responsibility
  • G31;
  • G32;
  • G34;
  • G35;
  • G36

Abstract

This article uses the extended case method to explore senior executives’ corporate finance decisions. We quantified firm’s finance practices using a mail survey, and then – to resolve puzzles in managers’ decision processes – conducted face-to-face interviews with chief finance officers of large listed firms. The interviews identified six themes as consistent influences on finance decisions: pressures imposed by clienteles; constraints on resources; risk management; heuristics; real options; and sustainability. We conclude that managers are logical and rational in their decisions, but employ a wider range of criteria than assumed in conventional finance theories.