Optimal Financing and Dividend Strategies with Time Inconsistency in a Regime Switching Economy

Table 1

Summary of the parameter values.

Parameters	Symbol	State G	State B
Risk-free rate/discount factor		5%
Volatility of productivity shock		12%
Rate of depreciation		15%
Risk-neutral mean productivity shock		20.78%
Adjustment cost parameter		1.8
Center of adjustment cost parameter		15%
Proportional cash-carrying cost		1.5%
Proportional financing cost		6%
State transition intensity		0.125	0.5
Capital liquidation value		1	0.3
Fixed financing cost		0.5%	50%
Price of risk for financing shocks