"The costs of insufficient cash, referred to as "ripple effects," are discussed in detail. They arise because the firm is unable to invest in value-enhancing projects, must raise expensive external capital, or is forced to sell assets. Firms with the greatest potential to experience ripple...

We examine the conflicts of interest and the flow of information between divisions of financial institutions. Using data on analyst recommendations and stockholdings of investment banks advising acquirers in mergers, we find evidence that information from investment banking flows to other...

We analyze the corporate risk management policies of 44 companies in the gold mining industry. Firms tend to decrease hedging as prices move against them—behavior contrary to that predicted by risk management theory. These results, along with new survey evidence, suggest that firms attempt to...

This study examines the effect of financial flexibility and the level and certainty of operating performance on the choice to change dividends, pay special dividends, and repurchase shares. Firms that increase payouts have excess financial flexibility and exhibit positive concurrent income...