A central question in corporate finance literature relates to the choice between debt and equity. The debate on capital structure choice has been fueled by the publication of the article of Modigliani and Miller (1958). These pioneers of finance beg the question of the pertinence of capital structure. They demonstrated that in efficient, perfect, and integrated capital market, firms draws no gains from opportunistically switching between debt and equity.
Therefore, firms can not reduce the overall capital cost by adopting one financial structure instead of another. Subsequently, the static trade-off theory suggests that there is an optimal capital structure determined by the tax structure, costs of financial distress, and agency problems. A deviation from this target level of debt pushes firms to adopt an adjustment process toward this optimum.
The presence of cholesterol in human and other mammals is vitally important for the cell membrane function. However, an excessively high serum cholesterol concentration is a risk factor for cardiovascular diseases (CVD). In today’s world CVD is the leading cause of death in developed countries and is becoming one of the leading causes of death in developing countries as well. This means that despite the successful prevention of atherosclerosis, cardiovascular diseases are still responsible for one of every three cases of death. The combination of changed eating habits, the use of tobacco, and less physical activity are the main causes of the wide spread distribution of CVD. Genetic factors may also be a reason for enhanced serum cholesterol levels (Fuentes et al., 2000; Lind et al., 2002; Zuliani and Fellin, 2003). It has been demonstrated that a 10% decline in total cholesterol is associated with a 20% risk reduction of coronary heart disease at the age of 70 and even lowers the risk by 50% at the age of 40 (Law et al., 1994). Traditionally, high serum cholesterol levels have been normalised using cholesterol-lowering drugs. At the same time, the importance of dietary intake has been emphasised by the nutritionists.
Selective inhibitors of 3-hydroxy-3-methylglutaryl coenzyme A reductase (HMG-CoA or statins), the rate-controlling enzyme of cholesterol synthetic pathway, are effective drugs but a very expensive method to treat hypercholesterolemia. Statins (e.g. mevastatin, lovastatin, cerivastatin and simvastatin) are able to lower serum total cholesterol by decreasing low density lipoprotein (LDL) cholesterol by 20%, even up to 55% (Chong et al., 2001; Blasetto et al., 2003; Endo, 2004). Some statins have, however, lately caused severe side effects which have resulted in major estimated revenue decreases for the pharmaceutical industry (Clark, 2003; Jamal et al., 2004). In August 2001, Bayer AG had to withdraw their cholesterol-lowering drug Lipobay®/Baycol® (cerivastatin) worldwide due to reports of side effects involving muscular weakness (rhabdomyolysis) (Maggini et al., 2004;. In less than a month, Bayer’s share had lost over 42% of its value (Bloomberg Terminal, 2004). The FDA (Food and Drug Administration) has received reports of serious muscle toxicity of another statin drug, Crestor® (rosuvastatin) by AstraZeneca. At the moment the FDA is evaluating these reports and comparing the frequency of reports to the reports of other statins. The importance of looking for optional methods of lowering cholesterol is therefore imminent.
We conducted this economic analysis at the request of USDA-APHIS-PPQ-EDP. Our objective was to quantitatively characterize the annual economic costs that the light brown apple moth (LBAM), Epiphyas postvittana, could cause to U.S. apple, grape, orange and pear crops if it were to establish throughout its potential range in the conterminous United States. This information can be used to inform regulatory policy and funding decisions regarding LBAM.
LBAM is a polyphagous multivoltine tortricid moth (Johnson et al., 2007). It is a significant agricultural and nursery pest in Australia and New Zealand where it attacks a variety of hosts including: citrus, grapes, pome fruits and stone fruits. LBAM damages hosts by feeding on the leaves, fruit and stems and can cause both internal and external fruit damage. If left untreated, LBAM crop damage levels have been estimated to be as high as 40 to 90 percent (Sutherst, 2000).
