Dual-class common stock allows for the separation of voting rights and cash-flow rights across the different classes of equity. We construct a large sample of dual-class firms in the United States and analyze the relationships of insider’s cash-flow rights and voting rights with firm value, performance, and investment behavior. We find that firm value is increasing in the level of cash-flow rig...

Non-linear external habit persistence models, which feature prominently in the recent “equity premium” asset pricing and macroeconomics literature, generate counterfactual predictions in the cross-section of stock returns. In particular, we show that in the absence of crosssectional heterogeneity in firms’ cash-flow risk, these models produce a “growth premium,” that is, stocks with high price-...

We test the predictions of several recent theories of how bank capital affects the rates that banks charge their borrowers. Key to all these theories is the notion that the relative bargaining power of a bank and its borrower are critical. We find that banks with low capital are more sensitive to borrower cash flow than are banks with high capital: lowcapital banks charge relatively more for bo...

The aim of this study is to evaluate the impact of cash dividend components on corporates earnings persistence and return on stock. The population of study consists of 109 companies listed in Tehran Stock Exchange from 2011 to 2016. Data was analyzed using regression model. According to results, the cash component of earnings is more persistent than accruals and it can be used to predict future...

I analyze cash flow characteristics of listed infrastructure investment companies and funds and compare this unique infrastructure sample with a noninfrastructure reference group. I confirm that infrastructure investment provide more stable cash flows than non-infrastructure investments. However, I do not find that investors positively value this cash flow stability. Instead, more volatile cash...

The Federal Reserve System of the United States is making changes to its cash recirculation policy to reduce depository institutions’ (banks’) overuse of its cash processing services. These changes will affect operating policies and costs at many institutions having large cash businesses and, in turn, impact cash transportation and logistics providers. This study provides the framework to study...

In this paper we study algorithms for pricing of interest rate instruments using a lattice interest model. The price is defined as expected discounted cash flow. If the cash-flows generated by the instrument depend on the full or partial history of the interest rates (path dependent contracts), then the pricing algorithms are typically of exponential complexity. We show that for some models, in...

Shareholders have imperfect control over the decisions of the management of a firm. We integrate a widely accepted version of the separation of owership and control — Jensen’s (1986) free cash flow theory — into a dynamic equilibrium model and study the effect of imperfect corporate control on asset prices and investment. We assume that firms are run by empire-building managers who prefer to in...