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 faceto-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.

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Cooper et al. report US evidence of the 'other January effect,' where returns in January are shown to have predictive power for returns over the subsequent 11 months. We re-examine the latest sub-period that they examine and find that the results using excess returns are not unique to January and that the effect for January is not apparent for raw returns. Further, using excess (raw) return data for 38 (44) other countries, limited support is found for the other January effect, with eight (five) of the remaining 11 months demonstrating a statistically significant effect in at least as many countries as exhibited the 'other January effect.' Further, there is no evidence to suggest that different tax-year ends across countries can explain the result. n We thank Bruce Grundy, Richard Heaney, seminar participants at the University of Melbourne and conference participants at the 12th Finsia-Melbourne Centre for Financial Studies Banking and Finance Conference for helpful comments, and acknowledge the financial support provided by a Melbourne Centre for Financial Studies research grant.1 Extensive sensitivity analysis was performed where multiple proxies for the 1-month risk-free rate of return were available. The results were not sensitive. 2 The methodology used here follows that of Cooper et al. However, as shown by Richardson and Stock (1989), among others, care should be taken when drawing inferences from multi-year returns.

The impact of the Global Financial Crisis (GFC) on capital markets has demonstrated that corporate stakeholders (including shareholders, lenders and independent board members) need to be far more aware of the decision-making processes followed by corporate executives. Gaining insight into these processes is difficult at any time, yet attempting to uncover (in any meaningful sense) how executives reached critical decisions in the lead-up to the GFC is almost impossible in hindsight. This article overcomes this problem in that it reports the results of interviews conducted with senior Australian finance executives in the lead-up to the GFC. These interviews were designed to elicit granular explanations for the rationale underpinning major corporate finance decisions, and their timing and subjects provide a unique ex ante profile of the perceptions of senior executives in large firms as the GFC developed. The most significant finding is that the corporate executives shared a decision framework with core features similar to those of financiers that are thought to have contributed to the GFC, particularly permanently increasing asset prices, easy liquidity and safety in powerful risk management techniques. Our findings have strong implications for independent board members who -at least in hindsight -failed to identify and mitigate risks from systemic reliance on appreciating markets and the inevitability of mean reversion.