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Home > Contributor Biographies > John C. Groth

Contributor Biographies

John C. Groth

Professor, Texas A&M University, USA

John C. Groth is professor of finance in the Department of Finance, Mays Business School, at Texas A&M University. He has received many teaching awards, authored numerous publications, and been cited as a major contributor to the finance literature. Dr Groth received his PhD from the Krannert School, Purdue University. He also holds degrees in physics and in industrial administration. He serves as a consultant in the areas of corporate finance and management education and conducts executive development programs. In addition to his work in finance, he researches and speaks on human capital and creativity and is a keynote speaker. In 2006 he was designated a Mays Faculty Fellow in Teaching Innovation.

Articles by this Author

  • Value Creation—Perspectives and Implications
    by John C. Groth
    This article focuses on the creation of value by a company or organization. We assume a competitive environment in the sense that the end user of a product or service has the right to buy or not to buy, to use or not to use a product or service. Although the discussion and examples focus on value creation in terms of economic measures—for example, an increase in share price—we recognize that other important measures of value exist. Quality of...
  • Capital Structure: Perspectives
    by John C. Groth
    Capital has three forms: human, tangible, and financial. In this article, we focus on how financing choices influence the cost of financial capital and company value. Capital structure focuses on the sources of financial capital. The choice of structure affects firm value in some economies.1The seminal works of Nobel laureate Franco Modigliani conceived important relationships and issues in capital structure. Subsequently, researchers have...
  • Risk—Perspectives and Common Sense Rules for Survival
    by John C. Groth
    We are fortunate to live in a world characterized by risk and uncertainty. Absent risk and uncertainty, with work, diligence, and access to information we could know each event that was to transpire. We would lose the opportunity for expectations, dreams, surprises, good fortune, and much more. We might as well have these “good” things, since in a certain world we presumably would still have “bad” events. Conceptually, in an uncertain world we...
  • Capital Structure: Implications
    by John C. Groth
    A tax environment that allows for the deduction of interest charges, but not the deduction of dividends, results in an optimal capital structure for a company. The optimal structure results in a lower weighted cost of capital (WCOC) for reasons examined in the article, Capital Structure: Perspectives. This article examines the implications of capital structure, and some of the key factors that influence capital structure.
  • Accounting and Economics—Critical Perspectives
    by John C. Groth
    This article reveals some important differences between accounting and economics. It does not seek to explain the various arguments that prompt, support, or question such differences. The ultimate objectives are an awareness that accounting and economics differ, and that knowledge of the differences allows the manager to benefit from both. At the same time, this understanding helps to avoid errors in the application of accounting and economics.
  • Capital Structure: A Strategy that Makes Sense
    by John C. Groth
    Perfect capital markets enjoy an array of assumptions, including no cost to bankruptcy, infinitely divisible financial assets and liabilities, no transaction costs, etc. Pursuing a selected optimal capital structure would allow minute adjustments, the issuance or redemption of small amounts of capital, and other conveniences. We would simply strive for the optimal debt/equity ratio depicted in Figure 1. Indeed, in this unreal world one would...

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