Leverage, uncertainty and investment decisions
| Main author: | Kenc, Turalay |
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| Other authors: | Driver, Ciaran |
| Format: | Journal Article |
| Online access: |
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| Summary: |
We explore the role of taxes on stimulating investment decisions for levered firms under cash flows and investment costs uncertainty using the adjusted present value-based real options approach developed by Myers and Read (2019). We extend their work to consider combined tax credits and uncertain investment costs. We then run a numerical analysis to quantify the impact of uncertainty, corporate tax and investment tax credit in stimulating investments. |
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| Other authors: | Driver, Ciaran |
| Language: | English |
| Published: |
Elsevier
2020
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