This book presents a new approach to the valuation of capital asset investments and investment decision-making. Starting from simple premises and working logically through three basic elements (capital, income, and cash flow), it guides readers on an interdisciplinary journey through the...

This study investigates the sensitivity of financing, investment, and distribution decisions to changes in operating cash flow, and whether these sensitivities depend on whether or not firms are financially constrained. Using a sample of 2,650 firm-years of Turkish firms for the period 1996 to...

This paper provides new evidence on how the largest nonfinancial firms actively manage the composition of their financial assets. We construct a novel hand-collected panel dataset to document their financial portfolio dynamics. Over the past decade, bond portfolios have grown to be at least as...

Firms with greater financial flexibility should be better able to fund a revenue shortfall resulting from the COVID-19 shock and benefit less from policy responses. We find that firms with high financial flexibility within an industry experience a stock price drop lower by 26% or 9.7 percentage...

Political environment is an important determinant of financial intermediation costs, which eventually affects the external financing patterns of firms. Political gyrations create policy uncertainty, which increases the information risk, weakens the investor demand, and reduces the offer size....

We provide in this appendix a relatively parsimonious description of the results for the fields incompletely treated or not addressed in the body of Coles and Li (2022, CL): Observed firm characteristics do best in explaining market leverage, cash holdings, CEO pay level, and accounting...

This paper conducts surveys that document CFO perspectives on corporate planning, corporate investment, capital structure, payout, and the goal of the firm. Current policy choices are compared to CFO survey data from two decades prior, which allows me to identify decision-making themes that are...

We distill evidence about the effects of COVID-19 on companies. Stock price reactions to the shock differed greatly across firms, depending on their resilience to social distancing, financial flexibility, and corporate culture. The same characteristics affected the response of firms' sales,...

Using a large sample of U.S. stocks covering more than three decades, we empirically test common criticisms of and rationales for stock repurchases. Repurchases account for a tiny fraction of the trading volume in a typical stock, making their price impact too small to facilitate short term...