Debt Financing and Real Estate Timing Decisions

Giovanni Marseguerra, Flavia Cortelezzi

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

6 Citazioni (Scopus)

Abstract

The paper analyzes the interaction between investment and financing decisions in a real option framework. In our model, the owner of an undeveloped real estate property (the asset in place) has the option to decide whether and when to develop/abandon his property. We show that debt financing induces the firm to invest earlier than in the pure equity financing case. Moreover, the incentive to anticipate the investment decisions increases with the amount of debt. I
Lingua originaleEnglish
pagine (da-a)193-212
Numero di pagine20
RivistaJournal of Property Research
Volume2009
Stato di pubblicazionePubblicato - 2009

Keywords

  • debt financing
  • investment
  • real options

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