Risk is a vital concept to grasp when investing in a firm or project. It is also a key ingredient required to evaluate the cost of capital and perform a valuation. An organization’s capital structure, specifically the amount of leverage and debt financing employed, must be accounted for to...

Con el objetivo de definir la forma de estimar teóricamente el costo de capital enColombia, se llevó a cabo una revisión de la literatura correspondiente en las bases dedatos electrónicas de las principales universidades del país. A partir de una revisiónde las prácticas metodológicas...

The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen (1986) shows that a firm's free cash flow is an important factor of overinvestment, the authors examine how free cash flow...

This study examines how the effect of uncertainty on capital investment varies between focused firms and conglomerate segments. One advantage of conglomeration is that it gives segments access to the conglomerate's internal capital market, making them less likely to be financially constrained....

Greater partisan alignment among lawmakers enhances their ability to respond rapidly to adverse shocks, but it also undermines the quality of checks and balances and encourages excessive governmental intervention in local areas aligned with the ruling party. We investigate how this form of local...

To date, readers of financial statements are not able to identify speculation as risk-increasing activity from public corporate disclosures. We examine a unique regulatory environment, in which the regulating authority recommends additional FX-disclosures in excess of prevailing reporting...

The aim of this contribution is to emphasize the importance of differential geometry within the financial modeling and usage process. The paper aims specifically at encouraging the inclusion of differential geometry to improve on the usage of a given model, and to reduce the inherent model...

Firms hold cash for a variety of different reasons. Generally, cash balances held in a firm can be called considered, precautionary, speculative, transactional and intentional. The first are the result of management anxieties. Managers fear the negative part of the risk and hold cash to hedge...

We study the returns the venture capital and private equity investment from 221 venture capital and private equity funds that are part of 72 venture capital and private equity firms, 5040 entrepreneurial firms (3826 venture capital and 1214 private equity), and spanning 32 years (1971 - 2003)...