By formulating an integrated strategy that combines the creation and exercise of real options together with other risk management techniques, management can reduce risk and thereby increase firm value. For example, a company that is in a position to delay investing without losing its competitive...

This paper explores the effect of project interrelationships on investment decisions and project values in a real options framework. We examine in detail the mutually exclusive case where a firm may invest in the development stage of two projects and then may select only a single project to...

This paper studies the impact of bank regulation and taxation in a dynamic model where banks are exposed to credit and liquidity risk and can resolve financial distress in three costly forms: bond issuance, equity issuance or fire sales. We find an inverted U-shaped relationship between capital...