This paper examines the interaction between investment and financing decisions of a firm using a real options approach. The firm is endowed with a perpetual option to invest in a project at any time by incurring an irreversible investment cost at that instant. The amount of the irreversible investment cost is directly related to the intensity of investment that is endogenously chosen by the fir...

This paper quantitatively investigates the optimal capital income taxation in the general equilibrium overlapping generations model, which incorporates characteristics of housing and the U.S. preferential tax treatment for owner-occupied housing. Housing tax policy is found to have a substantial effect on how capital income should be taxed. Given the U.S. preferential tax treatment for owner-oc...

a r t i c l e i n f o JEL classification: G32 G31 G33 C61 Keywords: Counterparty effect Market incompleteness Optimal capital structure This paper builds a static contingent-claim model that allows for examining the optimal capital structure with the joint arguments of counterparty default risk and market incompleteness. A first-passage-time model with jump default barrier is adopted to capture...

The capital structure and regulation of financial intermediary firms are important topics for regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt against its costs. The purpose of this paper is to analyze capital structure as a function of bank's specific variable factors. It examines the relationship ...

This paper models contracting arrangements between one Seller and one or more Buyers when the ‘‘deliverable’’ or output under the contract is produced in a non-scalable capital-intensive production facility. The basic model proposed allows the Seller and Buyers to negotiate bilateral contracts for the good in advance. On the day, the Seller and Buyers can also sell excess capacity or buy additi...

The financial crisis of 2007-2008 and the current sovereign debt crisis in Europe have focused attention on the macroeconomic consequences of debt financing. In this paper, we turn our attention to the use of debt finance in the corporate sector and study the generalequilibrium effects of debt finance on investment and growth. More precisely, we analyze underinvestment in equilibrium when marke...

Liquidity and Capital Structure* This paper solves for a firm's optimal cash holding policy within a continuous time, contingent claims framework that has been extended to incorporate most of the significant contracting frictions that have been identified in the corporate finance literature. Under the optimal policy the firm targets a level of cash holding that is a non-monotonic function of bu...

This paper aims to explore the mechanism of university intellectual capital on the performance of technology innovation of university by empirical research. On the base of theoretical analysis between the human capital, structure capital and relationship capital of university intellectual capital as well as its role on the performance of technology innovation, six hypotheses were proposed and a...

the aim of this research is the investigation the relationship between the capital structure and institutional ownership mid to the other effective factors on this relation in tehran stock exchange. the others factors include the percentage of stock dividend, profitability, business risk, assets structure, liquidity, growth, and company size. the statistical population of the research is 117 li...