We develop a model that endogenizes dynamic financing, investment, and cash
retention/payout policies in order to analyze the effect of financial flexibility on firm value. We …

This paper provides an introduction to real options, as well as highlighting some important
issues that are often neglected by real options analysts. While many books and surveys …

We provide a general valuation approach for capital budgeting decisions involving the
modularization in the design of a system. Within the framework developed by Baldwin and …

Significant progress has been made toward understanding a levered firm's optimal
investment policy under uncertainty. To date, however, not much work has concentrated on …

We review and critically examine the standard approach to equity valuation using a constant
risk-adjusted cost of capital, and we develop a new valuation approach discounting risk …

We propose a method to estimate the cost of debt in a continuous-time framework with an
infinite time horizon. The approach builds on the class of well-known earnings before …

This paper develops a new financial product that allows the profit-and-loss sharing (PLS)
principle to be enforced recursively in practice. A new equity-like financial product is …

We show how the value of a real option depends on corporate income taxes and the option's
“debt capacity,” defined as the amount of debt supported or displaced by the option. The …

The paper analyses the interaction between investment and financing decisions in a real
option framework. In our model, the owner of an undeveloped real estate property (the asset …

The aim of the study is to analyze uncertainties in broadband access network investments
and determine how real option valuation can be used to manage uncertainties. A rough …