scholarly journals The Shareholder Base and Payout Policy

2013 ◽  
Vol 48 (3) ◽  
pp. 729-760 ◽  
Author(s):  
Andriy Bodnaruk ◽  
Per Östberg
Keyword(s):  
Cash Holdings ◽  
Payout Policy ◽  
Open Market ◽  
External Financing ◽  
The Cost ◽  
Small Shareholder

AbstractWe examine the relation between the shareholder base and payout policy. Consistent with the idea that the shareholder base is related to the cost of external financing, we find that firms with small shareholder bases have lower payout levels and maintain higher cash holdings. We show that undertaking an open market repurchase results in a significant reduction in the size of the shareholder base. Consequently, we find that firms with small shareholder bases are less likely to undertake a repurchase (reduce the shareholder base even further) and are more likely to pay special dividends.

Share pledging, payout policy, and the value of cash holdings

2021 ◽  
Vol 61 ◽  
pp. 18-33
Author(s):  
Robin K. Chou ◽  
Yu-Chun Wang ◽  
J. Jimmy Yang
Keyword(s):  
Cash Holdings ◽  
Payout Policy ◽  
Value Of Cash

scholarly journals A Scorecard to Detect Financial Leverage Profitability

2018 ◽  
Vol 13 (3) ◽  
pp. 244
Author(s):  
Laura Broccardo ◽  
Luisa Tibiletti ◽  
Pertti Vilpas
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Weighted Average ◽  
Cost Of Debt ◽  
Corporate Management ◽  
External Financing ◽  
Present Value ◽  
Financial Decisions ◽  
Proposed Model ◽  
The Cost

This study investigates how balancing internal and external financing sources can create economic value. We set a financial scorecard, consisting of the Cost of Debt (COD), Return on Investment (ROI), and the Cost of Equity (COE). We show that COE should be a cap for COD and a floor for ROI in order to increase the Net Present Value at Weighted Average Cost of Capital and the Adjusted Present Value of the levered investment. However, leverage should be carefully monitored if COD and ROI go off the grid. Situations where leverage has the opposite effect on value creation and the Equity Internal Rate of Return are also discussed. Illustrative examples are given. The proposed model aims to help corporate management in financial decisions.

Corporate cash holdings and firm life cycle: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ajid Ur Rehman ◽  
Tanveer Ahmad ◽  
Shahzad Hussain ◽  
Shoaib Hassan
Keyword(s):  
Life Cycle ◽  
Growth Stage ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Cash Holdings ◽  
External Financing ◽  
Strategic Choices ◽  
Content Type ◽  
Firm Life Cycle ◽  
Corporate Cash Holdings

Purpose The purpose of this paper is to investigate how corporate cash holdings changes across firm life cycle and how firms undergo heterogeneous dynamic cash adjustment as they advance from one stage to the next stage. Design/methodology/approach This study uses an extensive data set of 2,994 Chinese A-listed firms. The authors use generalized method of moments (GMM) and Fisher Panel unit root testing to investigate the targeting behavior of Chinese firms. Findings The uni-variate investigation reveals that firms in the growth stage exhibits the highest cash levels and firms in the decline stage report the lowest cash levels. As growth firms have high investment needs, they may require raising external capital to meet investment needs. To avoid the costly external financing, firms in growth stage tend to hold more cash. The GMM estimation reveals that along all the phases of firm life cycle there are evidences of trade-off behavior of corporate cash holdings. The authors report that adjustment rate increases as firms enters into the growth stage. Practical implications The findings provide both theoretical and practical insight to align cash policies with the available strategic choices along firm life cycle in an emerging market characterized by market imperfections. Originality/value The study is unique from the context that it is applying robust methodology to one of rarely investigated area in corporate cash policy. The peculiar Chinese study setting characterized by higher information asymmetry, high cost of external financing and heterogeneous access to financing sources provide theoretical and empirical underpinnings to investigate and gain insight about how corporate cash policy can be aligned with strategic choices available across different stages of life cycle.

Crowdfunding, Financing Constraints, and Real Effects

2020 ◽  
Vol 66 (8) ◽  
pp. 3561-3580 ◽  
Author(s):  
Praveen Kumar ◽  
Nisan Langberg ◽  
David Zvilichovsky
Keyword(s):  
Demand Uncertainty ◽  
Spot Price ◽  
Financing Constraints ◽  
Optimal Contract ◽  
External Financing ◽  
Real Effects ◽  
Discriminating Power ◽  
Individual Demand ◽  
Novel Interactions ◽  
The Cost

We study the feasibility and optimal design of presale crowdfunding contracts where participating consumers pay a premium above the future expected spot price and financially constrained entrepreneurs balance the potential product–market distortions introduced through presale crowdfunding against the cost of traditional external financing. Our analysis shows how such crowdfunding contracts enable the execution of projects that could not be otherwise undertaken and highlights novel interactions between the cost of capital, demand uncertainty, and production. Tighter financing constraints reduce the ability of the monopolist to extract surplus but, contrary to the usual result, may increase production. We evaluate how uncertainty and market size reduce the price-discriminating power of the monopolist and affect the optimal contract regime. Nevertheless, we show how such presale price-discriminating contracts are implementable even when the number of potential consumers is relatively high and their individual demand is stochastic. This paper was accepted by Gustavo Manso, finance.

Usage of electronic resources at University of Delhi: a case study

2017 ◽  
Vol 36 (3) ◽  
pp. 96-107 ◽  
Author(s):  
Narender Kumar ◽  
Lalita Lalita
Keyword(s):  
Information Literacy ◽  
Average Cost ◽  
Literacy Program ◽  
Open Market ◽  
Electronic Resource ◽  
Content Type ◽  
Yearly Average ◽  
Total Approximation ◽  
The Cost ◽  
The University

Purpose The aim of this paper is to know the cost of per use, to analyze the cost per use in different subjects, to analyze the most economical as well as expensive electronic database being subscribed by the University of Delhi, to identify the database(s) for cancellation and to highlight issues related to usage statistics. Design/methodology/approach Usage statistics have been collected from the publishers for the period under study of full-text databases in the counting online usage of networked electronic resource (COUNTER) JR1 excluding downloads from an archive and Indian databases not providing COUNTER compliance usage. Usages of foreign databases have been analyzed through different parameters like yearly average cost per down load, subject-wise average cost per down, most economical databases and most expensive databases have been identified. A total approximation cost has also been worked by adopting standards practice to know the saving of University of Delhi by subscribing these databases. Findings The study concludes that in case of foreign databases, the cost per use has increased by 41.77 per cent in the past 10 years and the cumulative average cost per use has been Rs.55.07 less than $1 if converted into US$. In case of subject, the cheapest cost per use has been from the databases providing statistical data (Rs.26.50) and the costliest cost per use has been from discipline social science (99–196.61), followed by management (Rs.37.33), general databases (Rs.40.58), science (Rs.41.66), humanities (Rs.48.73), technology (Rs.93.22) and computer science (Rs.102.09) per use. It has also been found that the Britannica Online has been the most economical database costing Rs.2.33 and World Intellectual Property Search as most expensive costing Rs.14,902.19 per use. The study concludes that University of Delhi have saved substantial amount by subscribing these databases instead of purchasing these article from open market. The study concluded that though the usage statistics is an important parameter for renewal or cancellation, it should not be the only criteria. Research limitations/implications This study could not able to work out the cost per use of Indian databases, as they were not able to provide COUNTER statistics. Practical implications On the basis of the study, University of Delhi and institute may decide on renewal of these databases. The institute may take necessary action to promote these databases through information literacy program. On the basis of the study, University of Delhi and institute may decide on renewal of these databases. The institute may take necessary action to promote these databases through information literacy program. Originality/value This study is an empirical research based on original usage statistics provided by the publishers in COUNTER format. Earlier literature has also been studied and used. Proper citation and reference have been acknowledged. The study has been checked through plagiarism detecting software.

scholarly journals The Role Of Cash Holdings, Working Capital, Dividend Payout On Capital Investment

2018 ◽  
Vol 34 (3) ◽  
pp. 419-426
Author(s):  
Andrew Chan
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Capital Investment ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Payout Policy ◽  
Working Capital ◽  
Dividend Payout ◽  
Investment Spending ◽  
The Relationship

An objective of this paper is to investigate the relationship between firms' capital investment spending, cash holdings, and working capital in an expanding Asian financial market.  A sample of publicly traded manufacturing firms on the Hong Kong Stock Exchange was examined during the period 2005-2014. The empirical results provide strong and statistically significant evidence on the effect of cash flow on investment.  Working capital also exhibits significant relationship with capital investment spending, though the relationship is not as strong and significant as that with cash flow and cash holding.  Firms with low dividend payout policy over the sample period depended heavily on cash flow, changes in cash flow and, to a lesser extent, on working capital to finance spending on fixed plant and equipment.  These results suggest that the effect of capital investment spending financed by internal cash flow on firm value may depend on a firm's dividend payout.

scholarly journals Analysis of break-even points of Polish regional airports

2017 ◽  
Vol 2017 (12) ◽  
pp. 19-25
Author(s):  
Wojciech Augustyniak
Keyword(s):  
Early Stage ◽  
Fixed Costs ◽  
External Financing ◽  
Main Research ◽  
Regression Functions ◽  
Break Even Point ◽  
Minimum Volumes ◽  
Regional Airports ◽  
The Cost ◽  
High Share

The problematic nature of the high costs of building terrestrial aviation infrastructure does not end after the planning phase and the construction of new airspace. After the infrastructure has been commissioned, the cost of its depreciation and maintenance over the years represents a significant contribution to the cost of operating the airport. The high share of fixed costs is a direct reason for strong leverage. As a result, it is imperative to provide external financing to young airports at an early stage of their development. Owners of companies managing the above-mentioned infrastructure should be vividly concerned about the earliest possible break-even point, and consequently, the burden of direct subsidizing aviation activities in the region. The purpose of this article is to analyze the profitability thresholds at Polish regional airports as a means to discuss possible minimum volumes and revenues that emerging airports need to achieve as they do not generate losses. The main research method is a tool based on regression functions.

scholarly journals Do firms park capital? Evidence from the U.S. manufacturing sector

2018 ◽  
Vol 15 (2) ◽  
pp. 194-202
Author(s):  
Paul Moon Sub Choi ◽  
Francis Joonsung Won
Keyword(s):  
Capital Expenditure ◽  
Manufacturing Sector ◽  
Moving Average ◽  
Cash Holdings ◽  
Positive Association ◽  
Demand For Money ◽  
Cost Of Carry ◽  
The Cost ◽  
Corporate Cash Holdings ◽  
The U.S

This study uses the “cost of carry” (CoC) measure to identify the motive for corporate cash holdings. Based on the historical, moving-average holdings of currency and liquid assets, the measure represents the net opportunity cost of corporate demand for money. This study finds that large manufacturing firms in the U.S. park their capital in short-term assets appealing to the agency motive for cash holdings. Because dividend-paying firms can choose to distribute their capital to equity shareholders when their investment opportunities are unfavorable, these firms might show a non-positive association between capital expenditure and the CoC measure, championing the transactions motive. Still, dividend-paying large firms exhibit an overall positive correlation, suggesting that they park their capital on the agency motive. A detailed literature review and discussions are followed.

Sign in / Sign up

Export Citation Format

Share Document