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 capital of the U.S. state of Michigan. It is mostly in Ingham County, although portions of the city extend west into Eaton County and north into Clinton County. The 2020 census placed the city's population at 112,644, makin ...

, 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 facilities for carrying, arming, deploying, and recovering aircraft. Typically, it is the capital ship of a fleet, as it allows a ...

while serving in the

United States Navy The United States Navy (USN) is the maritime service branch of the United States Armed Forces and one of the eight uniformed services of the United States. It is the largest and most powerful navy in the world, with the estimated tonnage ...

during

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

. After his military service, Callard earned his MBA at the

University of Chicago Graduate School of Business The University of Chicago Booth School of Business (Chicago Booth or Booth) is the graduate business school of the University of Chicago. Founded in 1898, Chicago Booth is the second-oldest business school in the U.S. and is associated with 10 N ...

in 1943. He then taught statistics at

Miami University Miami University (informally Miami of Ohio or simply Miami) is a public research university in Oxford, Ohio. The university was founded in 1809, making it the second-oldest university in Ohio (behind Ohio University, founded in 1804) and the ...

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

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

; 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 expansion followed by recession in economic activity. These changes have implications for the welfare of the broad population as well as for private institutions. Typically business cycles are measured by examini ...

. 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.

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{{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