VALUATION OF FINANCIAL LEASE CONTRACTS

Authors

  • Stewart C. Myers,

  • David A. Dill,

  • Alberto J. Bautista

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    • The authors are, respectively, Professor of Finance, M.I.T., Financial Analyst, IBM Corp., and Financial Analyst, Baxter Laboratories.

      This paper combines the main results of two previous papers, [1] and [9]. In their early work on [1], Bautista and Dill used an Adjusted Present Value approach (see [10]) to analyze several actual lease contracts. Although tantalizing insights emerged, these analyses were somewhat cumbersome and difficult to generalize. Eventually Meyers derived the “exact” solution, which Bautista and Dill used in [1]. This solution is described in [9], a working paper prepared for seminars at the London Graduate School of Business Studies and the European Institute for Advanced Studies in Management in February 1975


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