A Model on Corporate Investment and Financial Decisions

Author

Lin, Sida ; Wang, Fengxia ; Ren, Shuming ; Xia, Zunquan

Author_Institution

Sch. of Math. Sci., Univ. of Technol., Dalian, China

fYear

2009

fDate

June 30 2009-July 2 2009

Firstpage

1360

Lastpage

1365

Abstract

The relationship between the corporate investment and financing decisions is one of the important issues in the corporate finance theory. This paper aimed at how managers develop reasonable investment and financing strategies to maximize the corporate profits. We construct a constrained optimization model as a decision tool for optimal investment strategies and optimal capital structure. A risk constraint based on VaR and CVaR is introduced in this paper, which can reflect the corporate financial risks more intuitively and reasonably than traditional methods.

Keywords

decision making; investment; optimisation; risk analysis; CVaR; VaR; constrained optimization model; corporate finance theory; corporate financial risks; corporate investment; decision tool; financial decisions; optimal capital structure; optimal investment strategies; risk constraint; Constraint optimization; Costs; Decision making; Electronic mail; Finance; Financial management; Industrial relations; Investments; Mathematical model; Reactive power; CVaR; Capital structure; Investment decision; Risk constraint; VaR;

fLanguage

English

Publisher

ieee

Conference_Titel

New Trends in Information and Service Science, 2009. NISS '09. International Conference on

Conference_Location

Beijing

Print_ISBN

978-0-7695-3687-3

Type

conf

DOI

10.1109/NISS.2009.214

Filename

5260595