We develop a model to examine the timing of investment decisions in relation to the issuance of convertible debt by … firms. Our model shows that when the demand shock has higher volatility, the firm finances the investment cost with high … tend to defer investments. Furthermore, we examine the investment decisions in which the convertible debt includes a call …

The investment premium -- the finding that firms with low asset growth deliver high average returns -- is an integral … part of recent factor models. I document empirically that the investment premium (1) reflects leverage, (2) does not exist … explanations of the investment premium including the q-theory of investment and behavioral finance. To explain the evidence, I …

We study the interaction between financing and investment decisions in a dynamic model where the firm has multiple debt … issues and equityholders choose the timing of investment. Jointly optimal capital and priority structures can virtually … eliminate investment distortions, because debt priority serves as a dynamically optimal contract. Examining the relative …

dynamic investment when the manager is compensated with cash salary, stock and option. We then focus on investigating the … dissimilar impact of stock and option compensations on the intertwined corporate investment dynamics and the capital structure … corporate investment. Increasing stock compensation monotonically incentivizes firms to use a higher leverage, whereas an …

We examine the interaction between investment and financing policies in a dynamic model for a firm with existing assets …-in-place and a growth option, of which investment cost is financed with equity and contingent convertible bond (CoCo). We attempt … to clarify how CoCo impacts on investment timing, capital structure and the inefficiencies arising from debt overhang and …