Ageing populations require larger healthcare facilities, in spite of growing public budget constraints, inducing to wonder whether we can afford what we increasingly need, accompanying sustainable and careful demography.New healthcare infrastructural investments, compliant with Eurostat rules,...

The question of what is really risk in capital investments is posed and discussed. It is suggested that the almost total acceptance of the concept that volatility constitutes a good measure of risk is wrong and leads towards a misallocation of economic resources. It is argued that the Expected...

In this paper Modigliani and Miller's risk class including only one type of firm to date, namely a non-net investing firm, is supplemented by a second type of firm, namely a net investing firm. One main result of the paper is the derivation of the Gordon and Shapiro growth formula within the...

In work the methodology of strategic management of the value of the company taking into account risks of the realized projects is offered. New measures of risks of projects, such as VaR of the project, ES project, marginal VaR of the project and cost of VaR of the project are considered and...

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...

IPO firms with high-powered CEO incentive contracts have lower failure rates in the aftermarket. Economically, an interquartile change in the distribution of CEO pay translates in a reduction of the failure risk probability by approximately 21%. The Pay Gap between the CEO and its subordinate...

What should a distressed buyer’s sourcing strategy be? We find that this depends on the dynamics in a potential in-court bankruptcy. To establish causality, we use a novel sourcing data set in combination with a unique quasi-natural experimental setting provided by a regulatory shock that...

In this article we illustrate how to price bonds and calculate the accrued interest, clean- and dirty price, from which we can compute a bond invoice i.e., the present value for a given cash investment in the bond. We present the classical bond pricing formulae and show how to modify this...

Uncertainty over future business conditions lies at the heart of firm decision-making. Uncertainty can arise from a myriad of sources and is difficult to measure. We present a simple conceptual framework showing how several key corporate decisions are affected by uncertainty. We also highlight...

Using an NPV-based revealed-preference strategy, I find that idiosyncratic risk materially affects the discount rate that firms use in their capital budgeting decisions. I exploit quasi-exogenous within-region variation in project-specific idiosyncratic risk and find that, on average, firms...