Investment Policy, Financial Policies, and the Control of Agency Conflicts
- Topics:
- Investment Strategy
- Tags:
- Agency,
- Finance,
- Financial,
- Financial Accounting,
- Financing,
- Investment,
- Investment Policy,
- Policy,
- University Of Rochester
- Source:
- University of Rochester
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Overview: This paper analyzes the interaction among investment, financing and hedging policies in a model where managers derive perquisites from investment. In this model, both hedging and financing policies affect a firm's investment policy, thus changing costs of over- and underinvestment. The paper demonstrates that combinations of financing and hedging policies typically better control deviations from value-maximization in investment policy than either of these policies taken individually.
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Format: PDF | Size: 336KB | Date: Apr 2004 | Pages: 37
