Charles "Chuck" Gordon Callard (2 June 1923 – 1 May 2004) was a prominent figure in the financial community due to his innovative application of mathematics and statistics to stock analysis. Born in

Lansing, Michigan Lansing () is the List of capitals in the United States, capital city of the U.S. state of Michigan. The most populous city in Ingham County, Michigan, Ingham County, parts of the city extend into Eaton County, Michigan, Eaton County and nort ...

, he was a Corsair fighter pilot on an

aircraft carrier An aircraft carrier is a warship that serves as a seagoing airbase, equipped with a full-length flight deck and hangar facilities for supporting, arming, deploying and recovering carrier-based aircraft, shipborne aircraft. Typically it is the ...

while serving in the

United States Navy The United States Navy (USN) is the naval warfare, maritime military branch, service branch of the United States Department of Defense. It is the world's most powerful navy with the largest Displacement (ship), displacement, at 4.5 millio ...

during

World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...

. After his military service, Callard earned his MBA at the University of Chicago Graduate School of Business in 1943. He then taught statistics at

Miami University Miami University (informally Miami of Ohio or simply Miami) is a public university, public research university in Oxford, Ohio, United States. Founded in 1809, it is the second-oldest List of colleges and universities in Ohio, university in Ohi ...

Oxford, Ohio Oxford is a city in northwestern Butler County, Ohio, United States. The population was 23,035 at the 2020 United States census, 2020 census. A college town, Oxford was founded as a home for Miami University and lies in the southwestern portion ...

for several years. Callard worked as a securities analyst in Chicago. He then held marketing and planning positions at Armour & Co. and

Ball Brothers The Ball brothers (Lucius, William, Edmund, Frank, and George) were five American industrialists and philanthropists who established a manufacturing business in New York and Indiana in the 1880s that was renamed the Ball Corporation in 1969. T ...

. In 1969, Callard left the corporate sector and started Callard, Madden & Associates. The insights that he developed became a bridge between academic finance and the worlds of corporate finance and asset management. Callard was the first in the inflationary 1970s to adjust standard accounting data so that they would conform with the financial concepts then being developed at the Graduate School of Business. He recognized the flaws in the traditional accounting measures and developed alternative economic measures of corporate performance. He used this approach to demonstrate that the effective corporate tax rates were much higher than the legislated rates and differed greatly among firms that otherwise appeared to be subject to the same tax rates. One of Callard's greatest contributions was to develop a systematic explanation of the

cost of capital In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". It is used to evaluate ne ...

for individual firms. The cost of capital for all firms varied in response to changes in the national inflation rate and to changes in corporate tax rates. The cost of capital for individual firms was affected by the levels and the rates of growth of their anticipated profits and by the variability of their cash flows. Similarly a cost of capital could be assigned to each of the business units within a firm. Callard's insights extended to

capital structure In corporate finance, capital structure refers to the mix of various forms of external funds, known as capital, used to finance a business. It consists of shareholders' equity, debt (borrowed funds), and preferred stock, and is detailed in the ...

; he distinguished between the costs of debt capital and the costs of equity capital, which varied extensively relative to each other over the phases of the business and

economic cycle Business cycles are intervals of general Economic expansion, expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general po ...

. While each firm was a price-taker in the capital market, each could affect its aggregate cost of capital by altering the shares of debt and of equity in its capital structure. Some firms were too extensively leveraged and could reduce their costs of capital by reducing the debt component of their capital structure while other firms could reduce their costs of capital by increasing the debt component. Chuck Callard died in 2004. A group study room was dedicated in his memory at the

Booth School of Business The University of Chicago Booth School of Business (branded as Chicago Booth) is the Postgraduate education, graduate business school of the University of Chicago, a private university, private research university in Chicago, Illinois. Founded in ...

External links

References

{{DEFAULTSORT:Callard, Charles G. 20th-century American educators American financial businesspeople United States Navy pilots of World War II Businesspeople from Lansing, Michigan University of Chicago Booth School of Business alumni 1923 births 2004 deaths Miami University faculty Place of death missing Economists from Michigan 20th-century American economists 20th-century American businesspeople