An Optimal Investment Policy in Equity-Debt Financed Firms with Finite and Infinite Maturities
نویسندگان
چکیده
In this paper we examine an optimal investment policy of the firm that is financed by issuing equity and debt. Recently, a number of researchers have studied the interaction among firm’s investment and financing decisions under uncertainty by means of real option framework. In the literature, investment problems for a firm with growth options, that is financed with equity and debt are investigated. In most studies, in order to simplify the problem, the infinite maturity for the investment and debt is assumed. However, in the real case firms are usually considered to have investment policies with finite option. This paper examines the optimal investment policy of the firm which is financed by issuing equity and debt during a period of time. Specifically, we discuss the effect of maturity on the investment timing, the firm value, the optimal leverage and coupon payment. JEL classification: D81; D92; E22; G31
منابع مشابه
An Optimal Investment Policy in Equity-Debt Financed Firms with Finite Maturities
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