on-going investment costs until completion. Since time to completion is uncertain, the total investment costs will also … completion and European options at completion (because of fixed final investment costs) we obtain simple closed form solutions …

We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings … payout policies. Facing costly external financing, the firm prefers to fund its investment internally, so that its optimal … substantial delay in investment; (4) A financially constrained firm over-invests in early stages of its life-cycle in an effort to …

investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question … financial shocks. By influencing the effective supply of credit, both types of shocks exert a powerful effect on investment and …

repay their loans when investment productivity turns out to be low ex post. We characterize market equilibrium, the …

. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is … investment payoff is a series of flows, the agent's idiosyncratic risk exposure alters both the implied option value and the …, consumption/savings, and portfolio selection. For a lump-sum investment payoff and an agent with a sufficiently strong …

This paper proposes a simple homogeneous dynamic model of investment and corporate risk management for a financially … investment and financing decisions. In our model, corporate risk management involves internal liquidity management, financial … constrained firm. Following Froot, Scharfstein, and Stein (1993), we define a corporation's risk management as the coordination of …

This paper examines the risk aspects of an investment-based defined contribution Social Security plan. We focus on the … investment risk can be reduced further by using a mixed system that combines pay-as-you-go and investment-based components or … risk after the plan is fully phased in. Individuals deposit a fraction of wages to a Personal Retirement Account (PRA …

We develop and analyze a model of a multi-stage investment project that captures many features of R&D ventures and … investment by the firm. In addition, the risks associated with the ultimate cash flows the firm realizes on completion of the … sources of risk, and allows us to study their interaction in determining the risk premia earned by the venture during …

probability distributions. This paper also explores the theoretical foundations of risk ranking, including proving a key …

idea that different individuals would rationally prefer different investment strategies and risk reduction options … current law. Calculations of expected utility show that these risk reduction techniques can raise expected utility relative to … the plans with no guarantees. The ability to do so depends on the individual's risk aversion level. This underlines the …