An Optimal Investment Policy in Equity-Debt Financed Firms with Finite Maturities
نویسندگان
چکیده
In this paper we examine an optimal investment policy of the firm, which is financed by issuing equity and debt during a period of time, using real options framework. We examine the effects of the maturity of investment on the values of equity, debt, firm, tax shield and bankruptcy cost. Specifically, we show that the investment timing depends not only on the investment threshold but also on the coupon payment. We also show that the optimal leverage ratio is determined independently of investment decision.
منابع مشابه
An Optimal Investment Policy in Equity-Debt Financed Firms with Finite and Infinite Maturities
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