Similar Search Results

Debt Policy, Corporate Taxes, and Discount Rates

Grinblatt, Mark - 2002

This paper studies the valuation of assets with debt tax shields when debt policy is a general time-dependent function of the asset's unlevered cash flows, value, and history. In a continuous-time setting, it shows that the value of a project's debt tax shield satisfies a partial differential...

Persistent link: https://www.econbiz.de/10012469352

A Quantitative Analysis of Distortions in Managerial Forecasts

Ma, Yueran - 2020

allows us to observe a long panel of managerial forecast errors for a sample of firms representative of the Italian economy …. We show that managerial forecast errors are <i>positively and significantly</i> autocorrelated. This persistence in … forecast error is consistent with managerial underreaction to new information. To quantify the economic significance of this …

Persistent link: https://www.econbiz.de/10012479353

Noise in Expectations : Evidence from Analyst Forecasts

De Silva, Tim - National Bureau of Economic Research - 2021

This paper quantifies the amount of noise and bias in analysts' forecast of corporate earnings at various horizons. We … next decompose the relative accuracy of these forecasts into three components: (i) noise, (ii) bias and (iii) analysts … both noise and bias are increase linearly. We then show most existing models lack a mechanism to account for these facts …

Persistent link: https://www.econbiz.de/10012585447

What Drives Firm-Level Stock Returns?

Vuolteenaho, Tuomo - 2001

I use a vector autoregressive model (VAR) to decompose an individual firm's stock return into two components: changes in cash-flow expectations (i.e., cash-flow news) and changes in discount rates (i.e., expected-return news). The VAR yields three main results. First, firm-level stock returns...

Persistent link: https://www.econbiz.de/10012470484

Predictability of Returns and Cash Flows

Koijen, Ralph S.J. - 2010

We review the literature on return and cash flow growth predictability form the perspective of the present-value identity. We focus predominantly on recent work. Our emphasis is on U.S. aggregate stock return predictability, but we also discuss evidence from other asset classes and countries

Persistent link: https://www.econbiz.de/10012462008

The Valuation of Cash Flow Forecasts : An Empirical Analysis

Kaplan, Steven N. - 1994

. We also invert our analysis and estimate the risk premium implied by transaction values and forecast cash flows, and the …

Persistent link: https://www.econbiz.de/10012474204

Are Low Interest Rates Deflationary? A Paradox of Perfect-Foresight Analysis

García-Schmidt, Mariana - 2015

We illustrate a pitfall that can result from the common practice of assessing alternative monetary policies purely by considering the perfect foresight equilibria (PFE) consistent with the proposed rule. In a standard New Keynesian model, such analysis may seem to support the "Neo-Fisherian"...

Persistent link: https://www.econbiz.de/10012457055

Myopia and Discounting

Gabaix, Xavier - 2017

We assume that perfectly patient agents estimate the value of future events by generating noisy, unbiased simulations and combining those signals with priors to form posteriors. These posterior expectations exhibit as-if discounting: agents make choices as if they were maximizing a stream of...

Persistent link: https://www.econbiz.de/10012455427

Do Financing Constraints Explain Why Investment is Correlated with Cash Flow?

Kaplan, Steven N. - 1995

This paper investigates the sources of the correlation between corporate cash flow and investment by undertaking an in-depth analysis of the 49 low-dividend firms identified by Fazzari, Hubbard, and Petersen (1988) as having an unusually high investment-cash flow sensitivity. We find that in...

Persistent link: https://www.econbiz.de/10012473608

Measuring U.S. Fiscal Capacity using Discounted Cash Flow Analysis

Jiang, Zhengyang; Lustig, Hanno; Nieuwerburgh, Stijn van; … - National Bureau of Economic Research - 2022

We use discounted cash flow analysis to measure a country's fiscal capacity. Crucially, the discount rate applied to projected cash flows includes a GDP risk premium. We apply our valuation method to the CBO's projections for the U.S. federal government's deficit between 2022 and 2051 and debt...

Persistent link: https://www.econbiz.de/10013190996