This paper examines the dividend and investment policies of a cash constrained firm that has access to costly external … funding. We depart from the literature by allowing the firm to issue collateralized debt to increase its investment in …

This paper examines the dividend and investment policies of a cash constrained firm that has access to costly external … funding. We depart from the literature by allowing the firm to issue collateralized debt to increase its investment in …

We propose a loglinear present-value identity in which investment ("scale"), profitability ("yield"), and discount … and facilitates novel insights from three empirical applications: (i) Both investment and profitability are important … because it predicts a long-run decline in future profitability. (iii) The investment spread significantly improves the ability …