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Attractive compounds of unattractive investments and gambles

Nielsen, Lars Tyge - In: The Scandinavian journal of economics 87 (1985) 3, pp. 463-473

Persistent link: https://www.econbiz.de/10001014896

Uncertainty and the likelihood of entry : an empirical assessment of the moderating role of irreversiblity

Folta, Timothy B.; Johnson, Douglas R.; O'Brien, Jonathan - 2001

Persistent link: https://www.econbiz.de/10001584495

Investment as a process of search

Zeira, Joseph - In: Journal of political economy 95 (1987) 1, pp. 204-210

Persistent link: https://www.econbiz.de/10001040633

Multi-Factor Dynamic Investment Under Uncertainty

Eberly, Janice C. - 2013

We characterize a firm's optimal factor adjustment when any number of factors face "kinked" linear adjustment costs so that all factor accumulation is costly to reverse. We first consider a general non-stationary case with a concave operating profit function, unrestricted form of uncertainty and...

Persistent link: https://www.econbiz.de/10013071810

Heterogeneous effect of uncertainty on corporate investment : evidence from listed firms in the Republic of Korea

Kim, Cheonkoo; Park, Jungsoo; Park, Donghyun; Tian, Shu - 2022

In this paper, we analyze the effect of financial uncertainty on corporate investment using firm-level panel data from the Republic of Korea. We find that financial uncertainty has a significant negative effect on corporate investment, and that the effect is heterogeneous across firms of...

Persistent link: https://www.econbiz.de/10012820828

Aggregate Return on Investment for Investments under Uncertainty

Magni, Carlo Alberto - 2017

which, compared with the risk-adjusted cost of capital, correctly signals wealth creation. For choosing between two mutually … exclusive projects, we derive an incremental AROI and an incremental risk-adjusted cost of capital, by means of which two … unequal-risk projects can be correctly compared. Iterating the incremental procedure, we show that the AROI approach correctly …

Persistent link: https://www.econbiz.de/10012973932

Preemptive Investment under Uncertainty

Steg, Jan-Henrik - 2016

This paper provides a general characterization of subgame perfect equilibria for strategic timing problems, where two firms have the (real) option to make an irreversible investment. Profit streams are uncertain and depend on the market structure. The analysis is based directly on the inherent...

Persistent link: https://www.econbiz.de/10013003011

Risk Analysis in Investment Appraisal

Savvides, Savvakis C. - 2019

as applied in the evaluation of investment projects to analyse and assess risk. The first part of the paper highlights … the importance of risk analysis in investment appraisal. The second part presents the various stages in the application of … the risk analysis process. The third part examines the interpretation of the results generated by a risk analysis …

Persistent link: https://www.econbiz.de/10012706367

Investment decisions with two-factor uncertainty

Compernolle, Tine; Huisman, Kuno J. M.; Kort, Peter M.; … - In: Journal of risk and financial management : JRFM 14 (2021) 11, pp. 1-17

This paper considers investment problems in real options with non-homogeneous two-factor uncertainty. We derive some analytical properties of the resulting optimal stopping problem and present a finite difference algorithm to approximate the firm’s value function and optimal exercise boundary....

Persistent link: https://www.econbiz.de/10012795555

Long-run investment under uncertain demand

Di Corato, Luca; Moretto, Michele; Vergalli, Sergio - 2013

In the literature investigating the impact of uncertainty on short-run and long-run investment, most authors have used a log linear profit function. This functional form has been generally considered a reasonable approximation for more general ones and has the advantage of providing closed form...

Persistent link: https://www.econbiz.de/10010189451