+612 9045 4394
 
CHECKOUT
Optimal Dynamic Investment Policies of a Value Maximizing Firm : Lecture Notes in Economic and Mathematical Systems - Peter M. Kort

Optimal Dynamic Investment Policies of a Value Maximizing Firm

Lecture Notes in Economic and Mathematical Systems

Paperback ISBN: 9783540511526
Number Of Pages: 185

Share This Book:

Paperback

$181.29
or 4 easy payments of $45.32 with Learn more
Ships in 5 to 9 business days

This book is a contribution to the area of dynamic models of the firm. In Chapter 1, a general investment decision rule based on the concept of net present value of marginal investment is developed. In chapter 2, the rule is applied in deterministic dynamic models of the firm. This rule can be expressed as follows: If the net present value of marginal investment is positive, it is optimal for the firm to grow as fast as possible; If the net present value of marginal investment is zero, the firm is in its optimal situation and it determines its investment policy to maintain this position; If the net present value of marginal investment is negative, it is optimal for the firm to contract as much as possible. In Chapter 3, the influence of adjustment costs of investment on optimal dynamic firm behaviour is studied. To that end, models with convex and concave adjustment cost functions are developed and analysed by using the investment decision rule described above. In Chapter 4, the stochastic dynamic theory of the firm is extended by connecting it with the Intertemporal Capital Asset Pricing Model (ICAPM) developed by Merton.

1. Introduction.- 1.1. Scope of the Book.- 1.2. The Net Present Value in the Theory of Corporate Finance.- 1.3. Review of Dynamic Models of the Firm.- 1.4. Outline of the Book.- 2. The Net Present Value in Dynamic Models of the Firm.- 2.1. Introduction.- 2.2. The Net Present Value in a Model with the Possibility of Debt Financing.- 2.2.1. Model Formulation and Optimal Solution.- 2.2.2. The Net Present Value and Further Economic Analysis.- 2.3. The Net Present Value in a Model with Activity Analysis.- 2.3.1. Model Formulation and Optimal Solution.- 2.3.2. The Net Present Value and Further Economic Analysis.- 2.4. The Net Present Value in a Model with Corporate and Personal Taxation.- 2.4.1. Model Formulation and Optimal Solution.- 2.4.2. The Net Present Value and Further Economic Analysis.- 2.5. The Net Present Value in a Model with a Growing Economic Environment.- 2.5.1. Model Formulation and Optimal Solution.- 2.5.2. The Net Present Value and Further Economic Analysis.- 2.6. Summary.- 3. The Net Present Value in Dynamic Adjustment Cost Models of the Firm.- 3.1. Introduction.- 3.2. The Theory of Adjustment Costs.- 3.3. A Dynamic Model of the Firm with a Financial Structure and a Convex Adjustment Cost Function.- 3.3.1. Model Formulation and Solution Concept.- 3.3.2. The Net Present Value and Further Economic Analysis.- 3.4. Dynamic Firm Behavior under a Concave Adjustment Cost Function.- 3.4.1. A Standard Optimal Control Model.- 3.4.2. Model Formulation and Solution when Applying Impulse Control.- 3.5. Summary.- 4. Dynamic Firm Behavior within an Uncertain Environment.- 4.1. Introduction.- 4.2. A Stochastic Dynamic Model of a Profit Maximizing Firm.- 4.3. A Stochastic Dynamic Model under the Assumption of Risk-Averse Investor Behavior.- 4.3.1. Model Formulation and Optimal Solution.- 4.3.2. The Model Extended with the Intertemporal Capital Asset Pricing Model.- 4.4. Summary.- 5. Conclusions.- Appendix 1. Solutions of The Models of Chapter 2.- A1.1. The Model with the Possibility of Debt Financing.- A1.1.1. The Optimal Trajectories.- A1.1.2. The Net Present Value Formulas.- A1.2. The Model with Activity Analysis.- A1.2.1. The Optimal Trajectories.- A1.2.2. A Comparison with the Results of Van Loon.- A1.2.3. The Net Present Value Formulas.- A1.3. The Model with Corporate and Personal Taxation.- A1.3.1. The Optimal Trajectory.- A1.3.2. A Comparison with the Results of Van Schijndel.- A1.3.3. The Net Present Value Formulas.- A1.4. The Model with a Growing Economic Environment.- A1.4.1. The Optimal Trajectory.- A1.4.2. The Net Present Value Formulas.- Appendix 2. Solutions of the Models of Chapter 3.- A2.1. The Model with a Financial Structure and a Convex Adjustment Cost Function.- A2.1.1. The Optimal Trajectories.- A2.1.2. The Net Present Value Formulas.- A2.1.3. Extension of the Planning Period.- A2.1.4. The Case of an Infinite Time Horizon.- A2.2. The Model with a Linear Adjustment Cost Function.- A2.3. The Model with Concave Adjustment Costs and Impulse Controls.- Appendix 3. The Additional Solutions and Mathematical Proofs of Chapter 4.- A3.1. The Model of a Profit Maximizing Firm.- A3.2. The Model under the Assumption of Risk-Averse Investor Behavior.- List of Symbols.- References.

ISBN: 9783540511526
ISBN-10: 3540511520
Series: Lecture Notes in Economic and Mathematical Systems
Audience: General
Format: Paperback
Language: English
Number Of Pages: 185
Publisher: Springer-Verlag Berlin and Heidelberg Gmbh & Co. Kg
Country of Publication: DE
Dimensions (cm): 24.41 x 16.99  x 1.07
Weight (kg): 0.33