Accountancy: Faculty Publications
A Simple Option-Theoretic Approach to the Lease Versus Purchase Decision
Document Type
Contribution to Book
Publication Date
2011
Publication Title
Research in Finance
DOI
10.1108/S0196-3821(2011)0000027009
ISBN
978-0-85724-542-7
Abstract
Existing approaches to the financial lease versus purchase decision assume, at least implicitly at the moment of the decision, that purchase entails ownership of the leasable asset over its entire remaining economic life. At any subsequent moment in time, however, if a firm already owns the leasable asset, it can retain long-term use of the asset by deciding to either retain ownership or enter into a sale and leaseback agreement. The purpose of this chapter is to detail the derivation of an innovative, yet intuitive, theoretical approach to analyze a firm's financial lease versus purchase decision in asset markets conducive to future sales and leaseback of owned assets.
Recommended Citation
Harter, Charles, Wm. Steven Smith.
2011.
"A Simple Option-Theoretic Approach to the Lease Versus Purchase Decision."
Research in Finance, John W. Kensinger (Ed.), 27: 195-222: Emerald Group Publishing Limited.
doi: 10.1108/S0196-3821(2011)0000027009 isbn: 978-0-85724-542-7
https://digitalcommons.georgiasouthern.edu/account-facpubs/8
Copyright
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