Models of capital investments with private information and incentives: a selective review

Article Abstract:

A review of research studies on capital budgeting was conducted to determine the roles of the various models of capital investments and the problems encountered by a manager in granting incentives. The studies discuss various models, including the One Period Model and the Multiperiod Model. Both models have different variables interplaying with one another which affect capital budgeting. The models' shortcomings such as deemphasizing on some important facets of capital budgeting conditions are discussed and further studies regarding problems on capital budgeting are suggested.

Capital Budgeting, Capital Management-Internal Funds NEC, Capital markets, Financial management, Business budgets

---

The nature of option interactions and the valuation of investments with multiple real options

Article Abstract:

An analysis describing the nature of option interactions and valuation of capital budget investments with multiple real options is presented. A generic example is presented to illustrate the importance of accurate accounting for interactions. Results show that an additional option's incremental value exhibits less value compared to its case in isolation. In addition, research validates findings that the value of flexibility exhibits common option properties.

---

Optimal replication of options with transactions costs and trading restrictions

Article Abstract:

An analysis of option replication in the presence of transactions costs and trading restrictions in the market is presented. The analysis focuses on a strategy where initial costs of a contingent claim's replication is minimized. It is shown that periodical revisions of portfolios do not yield optimal results in markets with trading frictions. The best possible case in such a situation is a cash flow surplus inexcess of desired levels.

Cost (Economics), Costs (Economics)

Similar abstracts:

• Abstracts: Managerial preference, asymmetric information, and financial structure. Investment, uncertainty, and liquidity
• Abstracts: Diversification, vertical integration, and industry analysis: new perspectives and measurement. Vertical integration in franchise systems: agency theory and resource explanations
• Abstracts: A note on the cost of capital and investment evaluation for companies under the imputation tax. Dividend policy and the capital structure under the imputation tax system: some clarifying comments
• Abstracts: The process of national industrial regeneration and competitiveness. Understanding new markets for new products
• Abstracts: Similarity judgments in strategy formulation: role, process and implications. Dynamic interaction between strategy and technology

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.