The COncept of Financial Flexibility: A Note

F. Bancel and A. Richard

Working Papers from Ecole Superieure de Commerce de Paris. Groupe ESCP-

Abstract: The purpose of this article is to present a sequential modelization of the following dilemma: should a firm get indebted today or should it keep the option of getting indebted later under better terms? Thus, we shall first define the concept of financial flexibility and then give a modelization of this concept along with simulations based on the inclusion of the opportunity cost due to immediate indebtment.

Keywords: FINANCIAL ADMINISTRATION; DEBT (search for similar items in EconPapers)
JEL-codes: C51 G11 (search for similar items in EconPapers)
Pages: 11 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:fth:ecsucp:97/133

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