Iman Soukhakian; Hirad Nazari; Arash Tahriri
Abstract
Cash is considered as the most important internal source of any firm under its management’ control. The marginal value of cash is influenced by management ability. The purpose of the present study is to investigate the relationship between managerial ability and its impact on the marginal value ...
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Cash is considered as the most important internal source of any firm under its management’ control. The marginal value of cash is influenced by management ability. The purpose of the present study is to investigate the relationship between managerial ability and its impact on the marginal value of cash. In this regard, information of 176 firms listed on the Tehran Stock Exchange during the period of 2012-2018 was studied. Managerial ability is measured according to the model of Demirjian et al. (2012). Also, Abnormal share returns and the Capital Asset Pricing Model (CAPM) is used to measure marginal value of cash. The main econometric methods of the research are multiple regression (with robust standard error, plus industry and year fixed effects) as well as a clustering method. The main results of the study show that the managerial ability has a significant positive association with marginal value of cash. In other words, marginal value of cash is higher for firms that hire capable managers, because they make better use of available financial resources, including cash, and greater returns for the firms.
Saber Sheri Anaghiz
Abstract
The company's ability to identify potential funding sources both internal and external, are the main factors of growth and development. The main objective of companies is to maximize shareholder wealth and the company's capital structure is one of the factors contributing to this, that involve financial ...
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The company's ability to identify potential funding sources both internal and external, are the main factors of growth and development. The main objective of companies is to maximize shareholder wealth and the company's capital structure is one of the factors contributing to this, that involve financial resources commensurate with the risk and return. On the other hand, several studies have shown that due to the problems of the traditional theory of capital structure, one of the most important factors, affecting the issues of financing in companies, is financial flexibility. This study examines the impact of financial flexibility on capital structure decisions. For this purpose, the companies listed in Tehran Stock Exchange, 108companies were selected and financial data for the years 1382 to 1392 were studied. The results indicate that current period financial flexibility has a significant and positive relationship with capital structure. The results also suggest that for companies that have negative marginal value of cash, financial flexibility in capital structure decisions, is a priority.
Nezamedin Rahimian; Mahmood Ghorbani; Keyvan Shbani
Volume 10, Issue 40 , January 2014, , Pages 151-175
Abstract
Cash is one of the most crucial resources in every enterprise and making a balance between available cash and its requirements is the most important criteria for safety economic in every entity. All the companies that have enough cash for their operation and those that hold cash more than their need, ...
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Cash is one of the most crucial resources in every enterprise and making a balance between available cash and its requirements is the most important criteria for safety economic in every entity. All the companies that have enough cash for their operation and those that hold cash more than their need, have some troubles. So in this study the elements that may have influence on cash holding and the association between persistent excess cash holding on the Tehran stock exchange were examined for achieving this target. Regard to existing constraints. 73 companies for a seven years period (1384-1390) were selected as sample. With respect to the data, fixed effect regression was used. Our result show that there is a positive and significant association between firm size, net working capital, operating cash flows and financing cash flows with cash holding and variables such as leverage, growth option, variability of cash flows, close cash substitutes and level of investment opportunities have no significant relationship with cash holding. Furthermore the results of second part of this research shows that excess cash holing in both form of transitory and persistent have no influence on shareholder value.
