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...

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...

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...

We use investment-cash flow regressions to show that both asymmetric-information and agency problems are more severe in Continental Europe than in the Anglo-Saxon countries leading to too little investment by firms with attractive investment opportunities and too much by those with poor...

El objetivo del presente trabajo es analizar la influencia que tienen las decisiones de endeudamiento, de distribuci¢n de dividendos y la estructura de propiedad sobre el valor de mercado de la empresa en situaciones caracterizadas por la ausencia o existencia de oportunidades rentables de...

El presente trabajo analiza los determinantes financieros de la inversi¢n en activos de largo plazo de una muestra de empresas espa¤olas. El an lisis se articula en dos fases: identificaci¢n de aquellas empresas que sufren en mayor medida el efecto de las restricciones financieras y estudio...

Building on neoclassical reasoning, we propose a new multi-factor model that consists of the market factor and factor mimicking portfolios based on investment and productivity. The neo- classical three-factor model outperforms traditional factor models in explaining the average returns across...

This paper proposes a theory of corporate liquidity demand and provides new evidence on corporate cash policies. Firms have access to valuable investment opportunities, but potentially cannot fund them with the use of external finance. Firms that are financially unconstrained can undertake all...

The methodology and uses of Monte-Carlo simulation technique are presented as applied to the analysis and assessment of risk in the evaluation of investment projects. The importance of risk analysis in investment appraisal is highlighted and the stages in the process introduced. The results...