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Optimal Dynamic Investment Policies of a Value Maximizing Firm

  • Peter M. Kort

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 330)

Table of contents

  1. Front Matter
    Pages N2-VII
  2. Peter M. Kort
    Pages 1-8
  3. Peter M. Kort
    Pages 93-96
  4. Back Matter
    Pages 97-189

About this book

Introduction

1.1. Scope of the Book This book is a contribution to the area of "dynamic models of the firm". The motivation for this kind of research is the following: Empirical studies (e.g. Albach (1976)) have shown that the development of the firm over time can be divided into different stages. such as growth. stationarity and contraction. In order to understand and evaluate these stages in a proper way. it is important to develop a suitable theoretical framework. To that end. economists have applied dynamic mathematical techniques. such as optimal control theory. calculus of variations and dynamic programming to design and analyse dynamic models of the firm. In this way. the economic theory of the firm is extended to a dynamic context. Within the field of the dynamics of the firm this book - develops a general investment decision rule. based on the concept "net present value of marginal investment". which is applicable in deterministic dynamic models of the firm; - studies the influence of adjustment costs of investment on optimal dynamic firm behavior; - extends the stochastic dynamic theory of the firm by connecting it with a dynamic version of the Capital Asset Pricing Model. Before elaborating on "the dynamics of the firm". we first review the subject of net present value in the classical analysis.

Keywords

Finance Financing Investment asset pricing corporate finance

Authors and affiliations

  • Peter M. Kort
    • 1
  1. 1.Department of EconomicsTilburg UniversityTilburgThe Netherlands

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-642-48904-4
  • Copyright Information Springer-Verlag Berlin Heidelberg 1989
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-540-51152-6
  • Online ISBN 978-3-642-48904-4
  • Series Print ISSN 0075-8442
  • Buy this book on publisher's site
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