Corporate Policies with Permanent and Transitory Shocks
Autor: | Stéphane Villeneuve, Erwan Morellec, Sebastian Gryglewicz, Jean-Paul Décamps |
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Přispěvatelé: | Business Economics |
Rok vydání: | 2016 |
Předmět: |
Economics and Econometrics
050208 finance business.industry Financial economics media_common.quotation_subject 05 social sciences Monetary economics Accounting Cash Cash holdings 0502 economics and business Value (economics) Economics Cash flow 050207 economics business Finance Risk management media_common |
Zdroj: | The Review of Financial Studies, 30(1), 162-210. Oxford University Press |
ISSN: | 1465-7368 0893-9454 |
Popis: | We model the financing, cash holdings, and hedging policies of a firm facing financing frictions and subject to permanent and transitory cash flow shocks. The permanent and transitory shocks generate distinct, sometimes opposite, effects on corporate policies. We use the model to develop a rich set of empirical predictions. In our model, correlated permanent and transitory shocks imply less risk, lower cash savings, and a drop in the value of credit lines. The composition of cash-flow shocks affects the cash-flow sensitivity of cash, which can be positive or negative. Optimal hedging of permanent and transitory shocks may involve opposite positions. |
Databáze: | OpenAIRE |
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