Hedging, financing, and investment decisions
Subtitle: a simultaneous equations framework
By: Chen-Miao Lin and Stephen D. Smith.
Contributors: Federal Reserve Bank of Atlanta.
Series: Working paper series / Federal Reserve Bank of Atlanta ;; 2005-5; Working paper series (Federal Reserve Bank of Atlanta : Online) ;; 2005-5.
Publisher: Federal Reserve Bank of Atlanta
Published: 2005
Place of publication: [Atlanta, Ga.]
Language: eng
Format: Electronic resource
Description: "The purpose of this paper is to empirically investigate the interaction between hedging, financing, and investment decisions.  This work is relevant in that theoretical predictions are not necessarily identical to those in the case where only two decisions are being made.  We argue that the way in which hedging affects the firms' financing and investing decisions differs for firms with different growth opportunities.  We empirically find that high-growth firms increase their investment, but not their leverage, by hedging.  However, we also find that firms with few investment opportunities use derivatives to increase their leverage"--Federal Reserve Bank of Atlanta web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 5/4/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.