Optimal investment and employment policy of a firm: A real options approach.

Summary The first chapter is a presentation of the main concepts and results concerning corporate finance in the light of some recent developments in labor economics.The second chapter aims at establishing the optimality properties concerning the investment and hiring of a firm within the framework of linear utility maximization.The third chapter deals with the (possible) problem of disinvestment and layoffs. In particular, we study the optimal decision problems of the manager facing either a market growth or a fall in demand for his product.The fourth chapter reconsiders the question by taking into account specifically an upper bound on the quantity that can be really sold.The fifth chapter considers the possible phenomena of mean reversion of the unit price of the product sold.The sixth and last chapter reconsiders the optimal decision problems for different possible forms of debt.