Corporate Liquidity and Capital Structure

• 成果类型: Article
• 署名作者: Anderson, Ronald W.; Carverhill, Andrew
• 署名单位: University of London; London School Economics & Political Science; University of Hong Kong
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhr103
• 发表日期: 2012
• 页码: 797
• 关键词: TERM STRUCTURES; AGENCY COSTS; debt; cash; valuation; BEHAVIOR; DESIGN; FIRMS

摘要

We solve for a firm's optimal cash holding policy within a continuous time, contingent claims framework using dividends, short-term borrowing, and equity issues as controls assuming mean reversion of earnings. Optimal cash is non-monotone in business conditions and increasing in the level of long-term debt. The model matches closely a wide range of empirical benchmarks and predicts cash and leverage dynamics in line with the empirical literature. Firm value is quite insensitive to changes in the level of long-term debt. The model has interesting implications for asset substitution, hedging, and pecking order. Growth opportunities do not greatly affect cash holding policy.