The non-neutrality of debt in investment timing: a new NPV rule

DOI10.1007/S10436-005-0016-9MaRDI QIDQ665553zbMATH OpenOpenAlexFDO

Authors Tarun Sabarwal

Publication date 5 March 2012

Published in Annals of Finance (Search for Journal in Brave)

Full work available at URL http://hdl.handle.net/1808/8861

zbMATH Keywords

debtdefaultinvestmentlimited liabilityNPVoption value

Mathematics Subject Classification ID

Credit risk (91G40) Corporate finance (dividends, real options, etc.) (91G50)

Recommendations

• On the neutrality of debt in investment intensity
• The timing of debt renegotiation and its implications for irreversible investment and capital structure
• Optimal investment timing and volume decisions under debt borrowing constraints
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• The debt hangover: Renegotiation with noncontractible investment
• On the (non-)equivalence of IRR and NPV
• Optimal investment and consumption when allowing terminal debt

Cites work

• Optimal contracts and competitive markets with costly state verification
• Optimal Contracts when Enforcement is a Decision Variable

Cited in

(8)

• Investment timing, debt structure, and financing constraints
• Debt and Development
• Optimal investment timing and volume decisions under debt borrowing constraints
• Two-stage investment, loan guarantees and share buybacks
• The timing of debt renegotiation and its implications for irreversible investment and capital structure
• Irreversible investment and discounting: an arbitrage pricing approach
• On the neutrality of debt in investment intensity
• The impact of voluntary disclosure on a firm's investment policy

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