Investment decisions by agribusiness firms are costly and subject to high volatility and uncertainty. In many cases, the project value is not only determined by its cash-flows stream and financial side effects but also by the presence of substantial future uncertainty such as project...

Based on a case study firm whose asset is an investment option, this paper focuses on the debt financing impact and the existence of agency conflicts regarding the option exercise on optimal investment decisions, optimal capital structure and option value. The investment opportunity which is a...