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Numerous studies have tried to provide a better understanding of firm-level investment behaviour using econometric models. The model specification of more recent studies has been based on two main approaches. The first, the real options approach, focuses on irreversibility and uncertainty in...
Persistent link: https://www.econbiz.de/10005677975
In this paper three contributions are made. First, empirical support is provided for the 'trade-off' model of corporate capital structure where companies borrow to take advantage of the tax benefits of debt, which they set against possible costs of overindebtedness. Second, it is shown...
Persistent link: https://www.econbiz.de/10012737105
Loan purchase and securitization by Freddie Mac, Fannie Mae and private-label commercial mortgage-backed securities (CMBS) grew rapidly during the 1990s and accounted for more than one-half of the net growth in multifamily debt over the decade. By facilitating the integration of the multifamily...
Persistent link: https://www.econbiz.de/10012778033
When individual petroleum-producing firms make their exploration and development investment timing decisions, positive information externalities and negative extraction externalities may lead them to interact strategically with their neighbors. This paper examines whether these inefficient...
Persistent link: https://www.econbiz.de/10011010062
Theoretical study identifying one modality with conditions necesary for the financial stabilization of an inherently unstable system; and 5040 other unstable dynamic modes. It draws on knowledge made available by the academic field of Control Engineering.
Persistent link: https://www.econbiz.de/10005125628
This paper examines strategic investment in the context of a duopolistic continuous-time real options game. Our contribution is twofold, economic and methodological. The former is the recognition that, under fixed costs of investment and time-to-build, the firm pays a fraction of the implicit...
Persistent link: https://www.econbiz.de/10012721572
We consider a firm that operates a single plant and has an expansion option to invest in a new plant. This setup leads to two-sided optimal stopping problems. We analyze optimal expansion timing and quantify the value of the loan commitment that the equityholder obtained from the lender and...
Persistent link: https://www.econbiz.de/10012723683
This article discusses the effects of judicial uncertainty over investments in stock bonds, and the Securities and Exchange Commission of Brazil (CVM) role in assuring certainty to investors.The article goes with an empirical investigation about the certainty provided by specialized commercial...
Persistent link: https://www.econbiz.de/10012730324
We analyze the financing of an expansion project, as well as the pre-expansion capital structure decision. Using too much equity (debt) in the expansion financing results in under (over)-investment relative to the first-best (total firm value maximizing) policy. We identify the expansion...
Persistent link: https://www.econbiz.de/10012730684
This paper investigates strategic investment policies in a duopolistic continuous-time real options game. Our contribution is twofold, economic and methodological. The former is the recognition that, under fixed costs of investment and time-to-build, a firm's exercise of its capital-replacement...
Persistent link: https://www.econbiz.de/10012731571