Rhodes-Kropf and Viswanathan (2004) suggest an adverse selection role of corporate cash reserve. Specifically, if investors know a bidder does not have to issue to invest, an attempt to do so sends a strong pessimistic signal of overvaluation. Despite its intuitiveness, this notion has not been explicitly studied in the empirical literature. Using a sample of acquisitions that are solely financ...

Entrepreneurs need cash to finance their investments. Since cash is costly to hold, entrepreneurs underinvest. If entrepreneurs are able to access secondary financial markets, then they can sell some of their less liquid assets for cash and invest at a higher level. When the secondary financial markets are over-the-counter (OTC), the amount of liquidity (cash) that is in the market affects asse...

However, the free cash flows scale is important for the financial health of the company, but it has also its own limitations. Moreover, it’s not immune from accounting tricks. Free cash flows can be considered as a measure of value for shareholders of listed companies on Tehran Stock Exchange. The managers of these companies have tended to use the earnings management for managing the free cash ...

We examine the intersection between corporate divestitures of tangible assets and investment in intangible capital (R&D) to provide new tests for the impact financing constraints have on real activity. A positive R&D sensitivity to asset sale proceeds indicates binding financing constraints since cash inflows from tangible asset sales are negatively correlated with productivity shocks and not o...

We construct network centrality measures for customer and supplier industries in the U.S. economy. Consistent with Ahern, et al. (2014), we find central suppliers have higher levels of systematic risk than central customers and therefore more exposed to sectoral shocks. We posit that central suppliers have incentives to channel funds to their customers via trade credit. Our empirical results ar...

one of the goals of financial reporting is to provide the useful information in order to facilitate the decision making. accounting information system is of high importance for the users to make specific decisions. the information should be analyzed to present the valuable information to the investors so that in this paper, the relative content and return additive with cash recovery have been a...