An investment decision model about managerial compensation and capital structure

2015 Fiscal Year Final Research Report

• Project/Area Number: 25870579
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Social systems engineering/Safety system; Money/ Finance
• Research Institution: Tokyo Metropolitan University (2015); Akita Prefectural University (2013-2014)
• Principal Investigator: Yagi Kyoko 首都大学東京, 社会(科)学研究科, 准教授 (80451847)
• Project Period (FY): 2013-04-01 – 2016-03-31
• Keywords: 経営者報酬 / ストックオプション / 債券の優先劣後構造 / リアルオプション / 資本構成 / 最適戦略

Outline of Final Research Achievements

We examined the financing strategies of a firm with stock option grants as managerial compensation in real options framework and discussed about the some consistencies of results in our theoretical model with empirical evidences. Also, we examined an investment problem of a firm with outstanding straight debt, which finances the investment cost with convertible debt. Then, we explored the interaction between financing and investment decision. Furthermore, we studied the default and debt renegotiation strategies when firms establish cross-holdings of securities.

Free Research Field

金融工学