There is strong empirical evidence that the pricing kernel is Ushaped,which provides a way to explain the substantial coskewnesspremium. Existing studies typically use a polynomial approximationof the pricing kernel. Problematically, these polynomials have, inmost cases, increasing parts by...

The optimal investment-dividend policy of a financially constrained firm whose earnings are subject to additive shocks is shown to exhibit several stylized economic and financial features of the firm life cycle which usually require considerably more complex models. This parsimonious model...

This paper presents a simple model of the firm life cycle that cap- tures several stylized economic and financial features which usually require considerably more demanding approaches. We study the opti- mal capital accumulation policy of a financially constrained firm whose revenue is subject...