ABSTRACT
Hereto, we have largely avoided imperfections and frictions of the real world in our conceptual framework, although we briefly dealt with the impacts of imperfections and frictions, including taxes payable to the State, in the new model of corporate finance in Chapter 6, and noted that the essential characteristics of our insights are not altered, compared to when we exclude them. We now admit greater realism, including the provision of tax-funded public goods. Our analysis has been descriptive so far, but to derive policy recommendations, we cannot avoid normative judgements anymore, which we intend to keep to a minimum, hence we will leave out many issues regarding the distribution of wealth, or the greater adverse effect of economic imbalances on one part of the society as against another.
