caa a22 4500 378911880 CHVBK 20180305123543.0 cr unu---uuuuu 161128e20040801xx s 000 0 eng 10.2202/1475-3693.1025 doi (NATIONALLICENCE)gruyter-10.2202/1475-3693.1025 El-Shazly Alaa Department of Economics, Cairo University Investment Under Uncertainty in Egypt: A Real-Options Approach [Elektronische Daten] [Alaa El-Shazly] This paper provides a numerical analysis of investment under uncertainty using Egyptian data. It is based on the theoretical foundations that the irreversibility of investment decisions and the uncertainty about their future rewards create a value to waiting for new information before the firm commits resources and incurs unrecoverable costs. Accordingly, the optimal investment policy of the firm balances the value of waiting for new information with the cost of postponing the investment in terms of forgone return. The analytical framework uses diffusion-jump processes to model uncertainty over time and shows that the value of waiting increases with the degree of uncertainty. As a consequence, uncertainty increases the hurdle rate to investment and can become a powerful deterrent to investors. ©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston JEL Classification: C61 nationallicence D81 nationallicence D92 nationallicence diffusion-jump processes nationallicence real options nationallicence optimal stopping nationallicence Review of Middle East Economics and Finance De Gruyter 2/2(2004-08-01), 51-60 2:2<51 2004 2 rmeef https://doi.org/10.2202/1475-3693.1025 text/html Onlinezugriff via DOI 1 research article jats NATIONALLICENCE 856 40 https://doi.org/10.2202/1475-3693.1025 text/html Onlinezugriff via DOI NATIONALLICENCE 100 1- El-Shazly Alaa Department of Economics, Cairo University NATIONALLICENCE 773 0- Review of Middle East Economics and Finance De Gruyter 2/2(2004-08-01), 51-60 2:2<51 2004 2 rmeef CC0 http://creativecommons.org/publicdomain/zero/1.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-gruyter