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Rollover Risk and Credit Risk
He, Zhiguo - 2010
This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the …
Persistent link: https://www.econbiz.de/10013148863
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Corporate Taxes and Internal Borrowing within Multinational Firms
Egger, Peter H. - 2012
This paper develops a theoretical model of multinational firms with an internal capital market. Main reasons for the emergence of such a market are tax avoidance through debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to...
Persistent link: https://www.econbiz.de/10013100410
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Multinationals and the High Cash Holdings Puzzle
Pinkowitz, Lee - 2012
Defining as normal cash holdings the holdings a firm with the same characteristics would have had in the late 1990s, we find that the abnormal cash holdings of U.S. firms after the crisis represent on average 1.86% of assets. While U.S. firms held less cash than comparable foreign firms in the...
Persistent link: https://www.econbiz.de/10013105723
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Why Do Foreign Firms Have Less Idiosyncratic Risk than U.S. Firms?
Bartram, Söhnke M. - 2012
idiosyncratic risk than a comparable U.S. firm. Country characteristics help explain variation in the level of idiosyncratic risk …, but less so than firm characteristics. Idiosyncratic risk falls as government stability and respect for the rule of law … improve. Idiosyncratic risk is positively related to stock market development but negatively related to bond market …
Persistent link: https://www.econbiz.de/10013117083
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How Relevant is Volatility Forecasting for Financial Risk Management?
Christoffersen, Peter - 2010
It depends. If volatility fluctuates in a forecastable way, then volatility forecasts are useful for risk management …; hence the interest in volatility forecastability in the risk management literature. Volatility forecastability, however … volatility forecastability decays quickly with horizon. Volatility forecastability, although clearly of relevance for risk …
Persistent link: https://www.econbiz.de/10012763820
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The Dark Side of Internal Capital Markets : Divisional Rent-Seeking and Inefficient Investment
Scharfstein, David S. - 2008
We develop a model that shows how rent-seeking behavior on the part of division managers can subvert the workings of an internal capital market. In an effort to stop rent-seeking, corporate headquarters will be effectively forced into paying bribes to some division managers. And because...
Persistent link: https://www.econbiz.de/10012774955
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Taxation, Corporate Financial Policy and the Cost of Capital
Auerbach, Alan J. - 2021
The cost of capital plays an important role in the allocation of resources among competing uses in a decentralized market system. The purpose of this paper is to organize and present what is known and what is hypothesized about the effects of taxation on the incentive to invest, via the cost of...
Persistent link: https://www.econbiz.de/10013232028
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Fundamental Tax Reform and Corporate Financial Policy
Gentry, William M.; Hubbard, R. Glenn - 2021
How tax reform affects corporate financial decisions helps determine whether reform will increase capital formation and simplify the tax system. This paper describes the effects of fundamental tax reform on corporate tax planning and summarizes economists' knowledge of the magnitude of these...
Persistent link: https://www.econbiz.de/10013249358
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The Valuation of Cash Flow Forecasts : An Empirical Analysis
Kaplan, Steven N.; Ruback, Richard S. - 2021
. We also invert our analysis and estimate the risk premium implied by transaction values and forecast cash flows, and the … relation of the implied risk premium to firm-level betas, industry-level betas, firm size, and firm book-to-market ratios …
Persistent link: https://www.econbiz.de/10013313241
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Financial Structure, Liquidity, and Firm Locations
Almazan, Andres; De Motta, Adolfo - 2008
This paper investigates the relation between a firm's location and its corporate finance decisions. We develop a simple model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those acquisitions, firms within clusters maintain more...
Persistent link: https://www.econbiz.de/10012773184