In light of the recent regulatory changes and the increase in cash reserves after the financial crisis of 2007-08, we examine the determinants of cash levels and the effects of excess cash on bank’s business policies, for both listed and unlisted banks. As for the determinants, we find that larger, more profitable, more capitalized, and more diversified banks hold less cash. As for bank’s polic...

the purpose of this study is to investigate the relationship between free cash flows and stock return considering managers' myopia. two hypotheses have been designed and tested, selecting 96 firms from accepted companies in the tehran stock exchange for six-year period from 2005 to 2010 and using stock return for three years ahead (to 2012). the results show that free cash flows are negati...

This paper reformulates the classical problem of cash flow valuation under stochastic discount factors into a system of linear equations with random perturbations. Using convergence results, a sequence of uniform approximations is developed. The new formulation leads to a general framework for deriving approximate statistics of cash flows for a broad class of models of stochastic interest rate ...

We examine the impact of excess cash on non-U.S. firms’ mergers and acquisitions behavior to test the effectiveness of U.S. investor protections in improving the corporate governance of cross-listed firms. We find that firms with higher excess cash make more acquisitions and experience lower announcement abnormal returns. While acquisition likelihood is similar, crosslisted firms make better M&...

this study investigates empirically the value investors place in excess cash holdingand how managerial ability impact on the value of cash holding for iranianfirms from 2006 to 2014. in this research, managerial ability calculated by usingthe data envelopment analysis (dea). following the approach of faulkender andwang, we find that the relation between managerial ability and value of cash hold...

Stock Liquidity and Corporate Cash Holdings: Feedback and the Cash as Ammunition Hypothesis We advance the feedback/cash as ammunition hypothesis, namely that firms hold cash to address feedback from stock prices to cash flows and growth opportunities. Firms with more liquid stocks are expected to hold more cash, the opposite of the prediction from a standard information asymmetry perspective o...

We extend the Barth, Cram, and Nelson (2001) model with disaggregated accruals by investigating whether cash flow components (core and non-core cash flows) improve cash flow predictability. BCN investigate the role of accrual components in predicting future cash flows while this study extends their study by investigating the role of cash flow components. We propose a cash flow prediction model ...

A n entrepreneur is an individual with a project blueprint and limited wealth. If launching the project requires expenses that exceed the entrepreneur’s initial wealth, he needs outside financing. Entrepreneurs differ from “hired management” in that they are indispensable for the firm’s day-to-day operations. This is because entrepreneurs add value to companies perpetually, rather than by handi...