I examine the impact of management cash flow forecasts on investors and analysts. The news in management cash flow forecasts is priced beyond total earnings news. Analysts revise earnings forecasts more for the news in these forecasts than for the news in accruals. I further find that the market’s higher pricing of cash flow forecast news is greater for firms 1) with bad earnings news, 2) in fi...

Cash ownership emits a powerful positive signal. We examine four sources of cash in firms, i.e., flows, holdings, proceeds from debt, and equity. the effects for firms growing by disruption, acquisition. Information signaling theory maintains that free flows may be used to increase shareholder wealth. Two-stage least squares regressions determined impact funding on disruptors size acquisition f...

Debt Policy, Corporate Taxes, and Discount Rates This paper studies the valuation of assets with debt tax shields when debt policy is a general time-dependent function of the asset’s unlevered cash flows, value, and history. In a continuous-time setting, it shows that the value of a project’s debt tax shield satisfies a partial differential equation, which simplifies to an easily solved ordinar...

A stochastic interest rate generator is a valuable actuarial tool. The parameters that specify a stochastic model of interest rates can be adjusted to make the model arbitrage-free, or they can be adjusted to accommodate an individual investor's subjective views. The arbitrage-free settings of the parameters must be used when pricing streams of interest-rate-contingent cash flows, for example, ...

We analyze the risk characteristics and the valuation of assets in an economy in which the investment opportunity set is described by the real interest rate and the maximum Sharpe ratio. It is shown that, holding constant the beta of the underlying cash flow, the beta of a security is a function of the maturity of the cash flow. For parameter values estimated from U.S. data, the security beta i...

We use China as a laboratory to test the effect of government quality on cash holdings. We build on, and extend, the existing literature on government expropriation and its interaction with firm-level agency problems by proposing a financial constraint mitigation argument. We find that firms hold less cash when local government quality is high, which is not consistent with the state expropriati...

We analyze the risk characteristics and the valuation of assets in an economy in which the investment opportunity set is described by the real interest rate and the maximum Sharpe ratio. It is shown that, holding constant the beta of the underlying cash flow, the beta of a security is a function of the maturity of the cash flow. For parameter values estimated from U.S. data, the security beta i...

analysis of non-laminar flows in coarse alluvial beds has a wide range of applications in various civil engineering, oil and gas, and geology problems. darcy equation is not valid to analyze transient and turbulent flows, so non-linear equations should be applied. non-linear equations are classified into power and binomial equations. binomial equation is more accurate in a wide range of velocit...

Diversified firms can trade at a discount to a matched portfolio of single-segment firms either because diversified firms have lower expected cash flows or because they have higher expected returns. We analyze whether diversification-discount firms have higher expected returns in order to compensate investors for offering less upside potential (or skewness exposure) than focused firms. Our empi...