In this paper, we examine the optimal investment policy of the firm which is financed by issuing equity, straight debt and convertible debt. We extend the model in Mauer and Sarkar (2005) over financing with convertible debt. We examine two different investment policies that maximize the equity...

Operations research uses quantitative models to analyze and predict the behavior of systems and to provide information for decision makers. Two key concepts in operations research are optimization and uncertainty. This volume consists of a collection of peer reviewed papers from the...

The purpose of this study is to develop a valuation framework for mergers and acquisitions by explicitly incorporating the synergy effect of mergers. Based on the real options approach, we introduce the upper and lower bounds of terms for an acquirer that makes a merger profitable to both the...

In this paper, we consider a model for valuing callable financial securities when the underlying asset price dynamic is unobservable but can be partially observed by receiving a signal stochastically related to the state of the real economy. In callable securities, both the issuer and the...