The study looked at whether companies consider changes in the cost of capital when making investment decisions. By analyzing individual stock option prices, the researchers found that firms tend to invest less when the cost of equity and overall capital costs go up. They also discovered that the impact of cost of capital on investment is similar to the effect of productivity on investment, as predicted by economic theory. This suggests that companies are good at adjusting their discount rates based on actual market conditions, even if traditional models don't always capture this accurately.