In investigating the relationship between vorticity and gyroscopic precession, we calculate the vorticity vector in Godel, Kerr, Lewis, Schwarzschild, and Minkowski metrics and find that the vorticity vector of the specific observers is the angular velocity of the gyroscopic precession. Furthermore, when space-time torsion is included, the vorticity and spin-curvature force change sign. This result is very similar to the behavior of the positive and negative helicities of quantum spin in the Stern-Gerlach force. It implies that the inclusion of torsion will lead to an analogous property of quantum spin even in classical treatment.
Purpose
– The purpose of this paper is to integrate Modigliani-Miller (MM) theory and stock repurchases strategy to procure a practical concept for capital decision.
Design/methodology/approach
– No-arbitrage proof model deduction was used in this study. The authors consider corporate tax and funding sources as two crucial factors drawn in the model. The paper derives some propositions by trichotomy property and keeps the key assumptions of MM Capital Structure Theory.
Findings
– There are two different effects on firm's value through stock repurchases. The positive effect occurs on firm's value through stock repurchases with loan fund. And the negative impact exists on firm's value through stock repurchases with idle fund.
Research limitations/implications
– Notably, in the real world there are three limitations with such an arbitrage transaction (Stulz, 2000). The first one is the default risk, and the second one is transaction costs and the last one is the perfect credit market assumption. In the near future, the authors suggest it would be interesting to involve the interest rate factor and contingent tax variable into our model.
Originality/value
– On the basis of no arbitrage opportunity, this paper considers both trichotomy property and MM theory. It proves the share repurchase strategy should be financed by borrowing fund. In contrast, share repurchase should not be executed with idle fund because of opportunity cost.
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