Abstract
In this chapter we apply the dynamic programming approach with the corresponding HJB equation derived in the preceding parts in order to solve a special case of the above presented model. Note that the following solution approach is based on [6, p. 13 - 16 and p. 37 - 44]. In fact the model is restricted such that we are only considering firms without growth option, therefore the two main terms change.
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© 2019 Springer Fachmedien Wiesbaden GmbH, part of Springer Nature
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Strini, J. (2019). Establishing the solution. In: On Stochastic Optimization Problems and an Application in Finance. BestMasters. Springer Spektrum, Wiesbaden. https://doi.org/10.1007/978-3-658-25691-3_3
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DOI: https://doi.org/10.1007/978-3-658-25691-3_3
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