DOES FINANCIAL PLAN IMPACT INVESTMENT DECISIONS?

Emerging Countries Sovereign Rating Adjustment using Market Information: Impact on Financial Institutions Investment Decisions

Assets, debts and other financial products issued by emerging countries are usually considered more speculative than those issued by developed economies. Therefore, relying on traditional rating agencies to invest in these countries is problematic as the information used to assess the economic and market condition in these economies is quickly outdated. Consequently, both the investment opportu...

Financial constraints and investment decisions of listed Indian manufacturing firms

Results: The analysis finds that cash flow sensitivity is a valid measure of financial constraints in the Indian manufacturing sector. Results according to splitting criteria found that investment decisions of standalone firms are more sensitive to cash flow than group affiliated firms. Further, splitting the firms according to market capitalization and tangible net worth reveals a higher degre...

Modeling international investment decisions for financial holding companies

Numerous research have been discovered to developed internationalization process model (investment to other country market). Like Johanson and Vahlne, they are among the first to discuss the internationalization process model. There are four key items underlying Johanson and Vahlne’s model, those are market knowledge, market commitment, commitment decision, and current activities. However, many...

Cash Flow Volatility, Financial Slack and Investment Decisions

Investment and Financial Decisions under Uncertainty and Exogenous Borrowing Rate

A competitive firm which chooses the timing of investment and optimal volume of debt is considered. The price of the firm’s output follows the geometric Brownian motion or more general jump-diffusion processes, and the firm takes an arbitrage free borrowing rate as given. The optimal timing of investment and volume of debt is computed, and it is shown that if the borrowing rate is close to the ...