An underinvestment problem arises if an additional investment project with positive net presentvalue increases only the market value of debt, but not of equity. As a way out the shift ofthe additional investment project and possibly also other projects to a subsidiary is considered.From the...

This contribution discusses a number of ideas for using a shareholder value approach to the problems of risk-adjusted performance measurement and the issue of capital allocation. We demonstrate that, if shareholder value is to be consistently maximised, then not only the total amount of equity...

In capital budgeting problems future cash flows are discounted using the expected one period returns of the investment ...

Diese Diskussionsarbeit stellt einen wichtigen Baustein zu einer geplanten Monographie über die Theorie der DCF-Verfahren dar. Es gibt viele Veröffentlichungen zu diesem Thema, die nach Ansicht der Verfasser ein Problem aufweisen: sie fußen nicht auf einem stringenten Konzept des Begriffes...

Will man den Einfluss der Einkommensteuer auf den Wert eines Projektes oder eines Unternehmens bestimmen, so bietet sich das Standardmodell als eines der populärsten Modelle an. Bei diesem Modell werden insbesondere im Nenner die Kapitalkosten um den Faktor (1-s) gekürzt, wobei s den...

This paper shows the advantages of staged investments for venture capitalists.

Starting from the Merton framework for firm defaults, we provide theanalytics and robustness of the relationship between defaultprobabilities and default correlations. We show that loans with higherdefault probabilities will not only have higher variances but also highercorrelations with other...

Recent studies have shown that the dynamics of firms (growth, job reallocation, and exit) are negatively correlated with the initial size of the firm and its age. In this paper we analyze whether financial factors, in addition to technological differences, are important in generating these...