THE INFLUENCE OF FIRM- AND CEO-SPECIFIC CHARACTERISTICS ON THE USE OF NONLINEAR DERIVATIVE INSTRUMENTS

Autor:	Pinghsun Huang, Harley E. Ryan, Roy A. Wiggins
Rok vydání:	2007
Předmět:	Microeconomics Executive compensation Interest rate derivative Derivative (finance) Operating cash flow Financial economics Accounting Economics Cash flow Price/cash flow ratio Cash management Cash flow forecasting Finance
Zdroj:	Journal of Financial Research. 30:415-436
ISSN:	1475-6803 0270-2592
DOI:	10.1111/j.1475-6803.2007.00221.x
Popis:	We examine why firms use nonlinear derivatives (e.g., options). Our results suggest that option characteristics in investment opportunities and debt, the payoff structure of incentive compensation, and free cash-flow agency problems influence the firm's choice. Investment opportunities, internally generated cash flow, business risk, and option compensation positively influence the use of nonlinear currency derivatives. Option feature in bonds positively influence the use of nonlinear interest rate derivatives, whereas bonus and stock compensation, and CEO tenure have a negative influence. In sum, nonlinear cash flow characteristics in investment opportunity, debt, and executive compensation all relate positively to nonlinear derivative usage.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7ae038bcf1185a5c805598a08486fb3e https://doi.org/10.1111/j.1475-6803.2007.00221.x Zobrazit plný text záznamu Plný text ve formátu PDF