We study how investors' preferences for robustness influence corporate investment, financing, and compensation … ambiguity aversion lowers Tobin's q; the average investment, and investment volatility. The entrepreneur values the project at …

consumption, portfolio allocation, financing, investment, and business exit decisions. The optimal capital structure is determined …

, consumption/savings, and portfolio selection. For a lump-sum investment payoff and an agent with a sufficiently strong …. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is … precautionary savings motive, an increase in volatility can accelerate investment, contrary to the standard real options analysis …

how liquidity and risk management policies coordinate investment and executive compensation policies to efficiently retain …

The interest rate is a key determinant of firm investment. We integrate a widely used term structure model of interest … rates, CIR (Cox, Ingersoll, and Ross (1985)), with the q theory of investment (Hayashi (1982) and Abel and Eberly (1994 …)). We show that stochastic interest rates have significant effects on investment and firm value because capital is medium …