The agency problem, investment decision, and optimal financial structure

Jyh Bang Jou, Tan Lee

研究成果: 雜誌貢獻期刊論文同行評審

3 引文 斯高帕斯(Scopus)

摘要

This article constructs a real options model in which a firm has a privileged right to exercise an irreversible investment project with a stochastic payoff. Supposing that the investment costs are fully sunk, a firm that exercises the investment option after debt is in place will then choose a better state to exercise this option as it issues more bonds. This debt-overhang phenomenon, however, benefits the firm since waiting is itself valuable. Accordingly, the firm will both exercise the investment option later and issue more bonds as compared with a firm that issues bonds upon exercising the investment option.

原文???core.languages.en_GB???
頁(從 - 到)489-509
頁數21
期刊European Journal of Finance
10
發行號6
DOIs
出版狀態已出版 - 12月 2004

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