The authors develop a conceptua] framework of the marketing-finance interface and discuss its implications for the theory and practice of marketing. The framework proposes that marketing is concerned with the task of developing and managing market-based assets, or assets that arise from the commingling of the firm with entities in its external environment. Examples of market-based assets includ...

We study the valuation and hedging of CSA interest rate derivatives. By CSA interest rate derivatives, we mean a portfolio of OTC interest rate derivatives between two defaultable counterparties, connected by the means of a netting agreement regarding the counterparty risk related cash flows between the two parties. CSA cash flows comprise the collateral relative to this netted set of contracts...

The rationale for using heuristics to establish a risk premium that is added to the risk-free rate to obtain the value of an investment is questioned and an alternative method, termed decoupled net present value (DNPV), is proposed. Rather than using utility theory concepts to decrease the value of uncertain cash flows, the risks associated with project cash flows are discretely quantified usin...

With free cash flows, borrowers can accumulate cash or voluntarily pay down debts. However, sometimes creditors impose a mandatory repayment covenant called “excess cash flow sweep” in loan contracts to force borrowers to repay debts ahead of schedule. About 17% of borrowers in our sample (1995-2006) have this covenant attached to at least one of their loans. We find that the sweep covenant is ...

Reliability and efficacy of accruals and cash flows which are among the most important factors affecting dividend deviation have always been in question and subject to anomalies. The presence of these anomalies in accruals and cash flows and its effect on future returns and the consequences that they can have in country’s investments are the main motives to choose this issue for the current stu...

This paper proposes a dynamic risk-based model that captures the high expected returns on value stocks relative to growth stocks, and the failure of the capital asset pricing model to explain these expected returns. To model the difference between value and growth stocks, we introduce a cross-section of long-lived firms distinguished by the timing of their cash flows. Firms with cash flows weig...