BAFI & OPER Seminar-Ritchken Wuhttps://weatherhead.case.edu/events/2015/10/29/bafi--oper-seminar
We study the impact of asset flexibility on the design of an optimal capital structure in a dynamic model where the firm has multiple debt issues and equityholders choose the timing and financing of future growth options as well as the operating policy of assets in place. We show that all things being equal, profitable firms with flexible assets exercise their growth options earlier, use less debt and will typically be less leveraged than otherwise identical firms with no asset flexibility. When asset flexibility allows risk shifting possibilities, growth options are exercised even earlier and leverage is even lower. The very lowest leverage firms are those with profitable flexible assets and large and relatively inexpensive growth options.
(216) 368-2040 (Tel)
(216) 368-6249 (Fax)
||Thursday, Oct. 29, 2015 from 1:30 p.m. to 3 p.m.
||Peter B. Lewis Building Room 220
11119 Bellflower Road
Cleveland, OH 44106-7235
||Speaker(s): Peter Ritchken
||Ritchken, Wu paper
Interested in learning more about Weatherhead programs? Request more information or apply now, or register for one of over 70 open enrollment courses through Executive Education.
Weatherhead School of Management at Case Western Reserve University cultivates creativity, innovation, and purpose-driven leadership to design a better world.