In the standard bond-pricing framework (e.g., Merton [1974]), the return function of holders of risky corporate debt is a concave function of the firm’s stochastic return, implying that a mean-preserving spread is associated with an increase in the bond risk premium. This feature of the standard debt contract has two important implications for the relationship between uncertainty and investment...

This paper uses a real options perspective to augment the standard R&D investment model and implements a firm-level empirical analysis to assess the practical significance of market uncertainty and its interactions with strategic rivalry and firm size. We use a measure of firm-relevant market uncertainty along with panel data and find that firms invest less in current R&D as uncertainty about m...

We investigate the analytical and empirical linkages between cash flow, uncertainty and firms’ capital investment behavior. Our empirical approach constructs measures of ownand market-specific uncertainty from firms’ daily stock returns and S&P 500 index returns along with a CAPM-based risk measure. Our results indicate that even in the presence of important firm-specific variables, uncertainty...

this study is intended to investigate the level of public-private cooperation in the process of agricultural development from the view point of potential investors and producers. to achieve this objective we used an adjusted jensen model as a conceptual framework for cooperation. in this process mutual responsibilities is provided to reveal different dimensions of strategic cooperation between ...

Traditional models of capital budgeting including taxes are based on deterministic tax rates and tax bases. In reality, however, there are multiple sources of tax uncertainty. Tax reforms induce frequent changes in both tax rates and tax bases, making future taxation of investments a stochastic process. Fiscal authorities and tax courts create additional tax uncertainty by interpreting current ...