This paper investigates the effects of macroeconomic volatility on non–financial firms’ cash holding behavior. Using an augmented cash buffer–stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross–sectional distribution of firms’ cash–to–asset ratios to narrow. We test this prediction on a panel of non–financial firms drawn from the annual COMPUSTAT databa...

Modeling the demand for cash and deposits is a primary concern for central banks. Within a wide range of academic contributions, payment choice models based on transaction sizes (TS models) have been promoted. However, TS models induce strong predictions about the use of payment instruments. In particular, all equal-sized transactions are supposed to be paid with the same payment instrument. We...

In this paper, we investigate the effect of a sharp cash level fluctuation resulting from the inflow and outflow of a large amount of cash and how the cash balance is managed. We describe the cash level evolution as stochastic jump-diffusion process with double exponential distributed jump size, and formulate a cash management model for minimizing the sum of the transaction and holding-penalty ...

before making decisions about the investment and financing the companies. it is necessary to know how the value of a company is determined. in this article three valuation methods are discussed: 1) value dirver method. 2) free cash flow method 3) economic value added method. in these methods the factors affecting the value of companies such as operating rate of return, cost of capital. amount o...

THE CONCEPT OF THE OPTIMAL MONEY STOCK The concept of the optimal stock of money introduced by Milton Friedman (1969) has stimulated much discussion and controversy. More recently, Lucas (1994) has provided new estimates of the welfare gain for the American economy from setting the optimal level of real cash balances. Before turning to a critique of Lucas, let us provide a rationale for this co...

Research Purpose. The purpose of research is analyzing the effect foreign institutional ownership on cash holding, based precautionary motive. Method. This uses quantitative methods, with single independent variables (foreign ownership). Cash holding (dependent variable) measured using formula logaritma and equivalents. Population used in study all non-financial companies listed Indonesia Stock...

in this paper disposition effect, selling winners and holding losers, in tehran stock exchange (tse) investment companies and its effect on these companies’ cash flows and performance using odean model has been reviewed and investigated. research findings show that the realized profit ratio is %19 higher than the realized loss ratio in all of investment companies in tse. this mean there is a be...

maximizing economic earnings is the most common goal in cut-off grade optimization of open-pit mining operations. when this is the case, the price of the product has a critical effect on optimum value of cut-off grade. this paper investigates the relationship between optimum cut-off grade and price to maximize total cash flow and net percent value (npv) of operation. in order to visualize this ...

The psychological factors of senior executives have an important impact on the firm’s financial policies. In this paper, we investigate association between CEO risk-taking entrepreneurial spirit and firm cash holdings, find that firms with higher less holdings. Further, financing constraints can mitigate negative whereas needs enhances them. Mechanism test illustrates affects holdings through c...