Editing Fisher separation theorem (section)

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In [[Economics]], the '''Fisher separation theorem''' asserts that the primary objective of a [[corporation]] will be the maximization of its [[present value]], regardless of the preferences of its shareholders. The theorem, therefore, separates management's "productive opportunities" from the entrepreneur's "market opportunities". It was proposed by—and is named after—the [[economist]] [[Irving Fisher]].

The theorem has its "clearest and most famous exposition" [https://web.archive.org/web/20080429203224/http://cepa.newschool.edu/het/essays/capital/fisherinvest.htm] in the ''Theory of Interest'' (1930); particularly in the "second approximation to the theory of interest" ([http://www.econlib.org/library/YPDBooks/Fisher/fshToI6.html#firstpage-bar II:VI]).

<blockquote style="background: 1; border: 1px solid black; padding: 1em;">
{{Ref improve section|date=January 2011}}
The Fisher separation theorem states that:
* the firm's [[Corporate_finance#The_investment_decision|investment decision]] is independent of the consumption preferences of the owner;
* the investment decision is independent of the [[Corporate_finance#Capitalization structure|financing decision]].
* the value of a capital project (investment) is independent of the mix of methods – equity, debt, and/or cash – used to finance the project.
</blockquote>

Fisher showed the above as follows:
#The firm can make the investment decision — i.e. [[Production-possibility frontier|the choice between productive opportunities]]  — that maximizes its [[present value]], independent of its owner's investment preferences.
#The firm can ''then'' ensure that the owner achieves his optimal position in terms of "market opportunities" by funding its investment either with borrowed funds, or internally as appropriate.