Similar Search Results

The Economic Value of Flexibility when there is Disagreement

Boot, Arnoud W.A.; Thakor, Anjan V. - Tinbergen Institute - 2003

We develop an economic theory of “flexibility”, which we interpret as the discretion or ability to make a decision that others disagree with. We show that flexibility is essentially an option for the decisionmaker, and can be valued as such. The value of the flexibility option is decreasing...

Persistent link: https://www.econbiz.de/10005137042

Disagreement and Flexibility: A Theory of Optimal Security Issuance and Capital Structure

Boot, Arnoud W.A.; Thakor, Anjan V. - Tinbergen Institute - 2003

financed. Debt offers little flexibility relative to equity. However, the flexibility offered by equity depends on the extent … now-familiar debt tax shield, and the firm’s capital structure is the consequence of a sequence of past security … essentially dynamic, and depends on the firm’s stock price, implying that firms issue equity when stock prices are high and debt …

Persistent link: https://www.econbiz.de/10005137258

Go Public or Stay Private: A Theory of Entrepreneurial Choice

Boot, Arnoud W.A.; Gopalan, Radhakrishnan; Thakor, Anjan V. - Tinbergen Institute - 2003

In this paper we analyze an entrepreneur /manager's choice between private and public ownership in a setting in which management needs some "elbow room" or autonomy to optimally manage the firm. In public capital markets, the corporate governance regime in place exposes the firm to exogenous...

Persistent link: https://www.econbiz.de/10005504882

Disciplining and Screening Top Executives

Martinez, Silvia Dominguez; Swank, Otto H.; Visser, Bauke - Tinbergen Institute - 2006

Boards of directors face the twin task of disciplining and screening executives. To perform these tasks directors do not have detailed information about executives' behaviour, and only infrequently have information about the success or failure of initiated strategies, reorganizations, mergers...

Persistent link: https://www.econbiz.de/10005016271

Acquisitions as a Real Options Bidding Game

Smit, Han T.J.; Berg, Ward A. van den; Maeseneire, Wouter De - Tinbergen Institute - 2004

This paper uses a unified treatment of real options and game theory to examine value appropriation in takeovers within a competitive environment of imperfect information. The integrated model considers a potential target as a shared real option on a bundle of resources. Competing potential...

Persistent link: https://www.econbiz.de/10005144572

How Important Are Risk-Taking Incentives in Executive Compensation?

Dittmann, Ingolf; Yu, Ko-Chia - Tinbergen Institute - 2009

This paper investigates whether observed executive compensation contracts are designed to provide risk-taking incentives in addition to effort incentives. We develop a stylized principal-agent model that captures the interdependence between firm risk and managerial incentives. We calibrate the...

Persistent link: https://www.econbiz.de/10004987438

A Monte Carlo Comparison between the Free Cash Flow and Discounted Cash Flow Approaches

Akalu, Mehari Mekonnen; Turner, Rodney - Tinbergen Institute - 2002

One of the debates in the capital budgeting model selection is between the free cash flow and DCF methods. In this …

Persistent link: https://www.econbiz.de/10005137022

Evaluating the Capacity of Standard Investment Appraisal Methods

Akalu, Mehari Mekonnen - Tinbergen Institute - 2002

The survey findings indicate the existence of gap between theory and practice of capital budgeting. Standard appraisal methods have shown a wider project value discrepancy, which is beyond and above the contingency limit. In addition, the research has found the growing trend in the use of value...

Persistent link: https://www.econbiz.de/10005137133

A Triptych Inquiry: Rethinking Sustainability, Innovation, and Financial Performance

Busch, Timo; Stinchfield, Bryan T.; Wood, Matthew S. - Tinbergen Institute - 2011

Management scholars have sought to answer the question: is there a financial payoff for ad-dressing ecological and social issues? We move beyond this question and include a time com-ponent for corporate financial performance (CFP) and a firm’s innovativeness in order to ask: when does it pay?...

Persistent link: https://www.econbiz.de/10008838575

The Analysis of Stochastic Volatility in the Presence of Daily Realised Measures

Koopman, Siem Jan; Scharth, Marcel - Tinbergen Institute - 2011

volatility model contains non-Gaussian return innovations and leverage effects. The empirical results reveal that measurement …

Persistent link: https://www.econbiz.de/10009322509