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,  and . In their early work on , Bautista and Dill used an Adjusted Present Value approach (see ) 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 . This solution is described in , 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