In this paper I develop and empirically test a model that highlights how the correlation
between cash flows and a source of aggregate risk affects a firm's optimal cash holding …

This paper studies the impact of both liquidity and solvency concerns on corporate finance. I
present a tractable model of a firm that optimally chooses capital structure, cash holdings …

We examine how the demand for financial flexibility affects firms' capital structure decisions.
We find that: developing firms that are in the phase of financial flexibility building have low …

We develop a dynamic contingent-claim framework to model S. Myers's idea that a firm is a
collection of growth options and assets in place. The firm's composition between assets in …

We analyze the value created by a dynamic integrated risk management strategy involving
liquidity management, derivatives hedging, and operating flexibility, in the presence of …

We investigate the impact of the Sarbanes–Oxley (SOX) Act on the cost of debt through its
effect on the reliability of financial reporting. Using Credit Default Swap (CDS) spreads and a …

Many structural models specify the default barrier, but few have explored its empirical
significance and determinants. The effect of liquidity shortage is not well measured, nor is …

This paper documents a new empirical finding: an investing strategy that is long in stocks of
firms with a high cash-to-assets ratio (High Cash portfolio) and short in stocks of firms with a …

In this paper, we develop a structural model that captures the interaction between the cash
balance and investment opportunities for a rm that already has some debt outstanding. We …

We investigate a firm's joint decision to hold cash and to hedge in the presence of financial
constraints. The predictions are tested using a sample of manufacturing firms. We confirm …