Many assets derive their value not only from future cash flows but also from their ability to serve as collateral. In this paper, we investigate this collateral value and its impact on asset returns in an infinite-horizon general equilibrium model with heterogeneous agents facing collateral constraints for borrowing. We document that borrowing against collateral substantially increases the retu...

By postulating a simple stochastic process for the firm’s cash flows in which the drift and the variance of the process depend on the investment policy of the firm, we develop a theoretical model, determine the optimal investment policy and, given this policy, calculate the ratio of the current value of the firm and the current cash flow which we call the “cash flow multiplier”. The main contri...

This paper documents the short and long term balance sheet effect of cash flows. We show that cash savings in the short run and debt reduction in both the short and the long run account for a substantial fraction of cash flow use. Although, in the long run, investment exhibits substantial sensitivity to cash flows, investment does not absorb the entire cash flow shock. In fact, the tighter the ...

This paper investigates the compensation usefulness of accounting variables along several important dimensions (accruals-based vs. cash-flows based, non-return vs. return, and gross vs. net measures), as well as the time series variation of performance measures in CEO bonus plans, using a unique panel of manually collected CEO bonus determinants spanning fiscal years 2006 to 2011. We document t...

In this paper, an efficient multi-objective model is proposed to solve time-cost trade off problem considering cash flows. The proposed multi-objective meta-heuristic is based on Ant colony optimization and is called Non Dominated Archiving Ant Colony Optimization (NAACO). The significant feature of this work is consideration of uncertainties in time, cost and more importantly interest rate. A ...

We read with great interest the paper by Schilder and colleagues on citrate anticoagulation versus systemic heparinisation (CASH) [1] and its related commentary [2], but would like to comment on two important metabolic issues. First, in-circuit ionized calcium was not monitored in the CASH trial. Keeping postfilter ionized calcium within tight limits, however, results in more optimal anticoagul...

We consider a principal-agent model, in which the agent needs to borrow from the principal to finance a project. Our model is based on DeMarzo and Fishman (2003), except that the agent’s cash flows are given by a Brownian motion with drift in continuous time. The difficulty in writing an appropriate financial contract in this setting lies in the fact that the agent can hide cash flows and not p...

The efficiency results of marginal-cost pricing have been used to justify the imposition of regulatory policy tools to determine optimal pricing. In the more sophisticated form, Ramsey pricing methodology is recommended as a pricingpolicy tool. These methods are static. Nevertheless, they are applied to major infrastructure industries such as telecommunications. At best, these methods assume pr...