Overinvestment of Free Cash Flow and Manager’s Overconfidence
نویسندگان
چکیده
منابع مشابه
Discussion of ‘‘Overinvestment of free cash flow’’
Richardson’s paper is a useful addition to the literature on the relationship between cash flow and investment. His approach to estimating this relationship is a new twist on earlier approaches. Like most of this literature, Richardson finds evidence that firms’ investment decisions are excessively sensitive to current cash flow, suggesting that violations of the Modigliani–Miller assumptions a...
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the purpose of this study is to investigate the relationship between free cash flows and stock return considering managers' myopia. two hypotheses have been designed and tested, selecting 96 firms from accepted companies in the tehran stock exchange for six-year period from 2005 to 2010 and using stock return for three years ahead (to 2012). the results show that free cash flows are negati...
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This paper examines the extent of firm level over-investment of free cash flow. Using an accounting-based framework to measure overinvestment and free cash flow, I find evidence that, consistent with agency cost explanations, over-investment is concentrated in firms with the highest levels of free cash flow. Further tests examine whether firms’ governance structures are associated with over-inv...
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ژورنال
عنوان ژورنال: International Business Research
سال: 2018
ISSN: 1913-9012,1913-9004
DOI: 10.5539/ibr.v11n3p48