Maximizing Owner's wealth under uncertainty and volatility: A system dynamics approach using evidence from Norwegian Oil Sector

摘要

This analysis focuses on maximizing firm value in presence of uncertainty and volatility in the oil market considering investment, financing and dividend policies as decision tool under different market conditions. Using system dynamics, we have developed a model for financial and physical processes of a leading firm in oil sector to grasp the dynamics and test policies in an effort to maximize the owner's wealth. Assuming market growth condition, investment policy seems to add most to the firm value. However, the combination of policies helps best to maximize the firm value.