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Previous studies that have examined the impact of the 2008 financial crisis on syndicated loans have ignored potential differences between lending banks by explicitly or implicitly aggregating all lenders together and focusing on borrower characteristics. One must jointly consider both borrower and lender to fully understand the complex role of the syndicate during this period. We consider the identity of the lender, with a focus on five major US banks that failed and their five corresponding acquirers. Our results highlight the distinct roles of investment and commercial banks and facilitate an understanding of relationship and transactional‐based lending. [ABSTRACT FROM AUTHOR]

ABSTRACT The concept of equivalent annual annuity (EAA) has long been used as a method of costing recovery of invested capital and the required return on invested capital over the [...]

A simulation-based study examined the influence of mean reversion and the functional form of the interest rate process on the value of the capital budgeting postponement option. A discrete simulation method was used in this study to formulate a model for valuing postponement options for capital budgeting projects. This simulation framework considers interest rate uncertainty and employs one of two different interest rate processes, to show the impact of mean reversion on the value of real options. The two processes used were the simple pure diffusion process introduced by Ingersoll and Ross (1992) and a stochastic mean reversion process. The latter is a mean reverting, constant elasticity of variance process, known as the Spahr-Schwebach process, that considers the current shape and level of the Treasury term structure. The analysis showed that the pure diffusion process places higher values on postponement options.