Fig. 1
From: Raising capital amid economic policy uncertainty: an empirical investigation
A sequential framework of the decision-making process to raise capital. The figure shows that during periods of uncertainty, firms may come across opportunities to invest in projects with positive Net Present Values (NPV) or require capital because of negative Free Cash Flows (FCF). Shareholders delegate the first decision to exploit management skills (Shibata and Nishihara 2010). Once the decision is made, the subsequent decisions about security choice and dollar volume incorporate shareholder interests represented by the board of directors