Persistent Link:
http://hdl.handle.net/10150/293406
Title:
The Effect of Cash Flow Forecasts on Cost of Debt
Author:
Hinkel, Timothy
Issue Date:
2013
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
I examine the impact of the presence and characteristics of equity analysts' cash flow forecasts on cost of debt. I find the presence of cash flow forecasts is associated with a lower cost of debt relative to firm-years with only earnings estimates or neither estimate. I also find cash flow forecast characteristics are associated with cost of debt after controlling for other known determinants of yield spreads. Additional analyses decomposing earnings forecast characteristics into cash flow and accruals components find the cash flow component is associated with cost of debt, but the accruals component is not. Overall, the results indicate that debt market participants find cash flow forecasts useful in reducing information asymmetry and/or providing monitoring, as well as being useful in providing information regarding expected default risk in determining expected returns.
Type:
text; Electronic Dissertation
Keywords:
Accounting
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Accounting
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan; Sunder, Shyam V.

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleThe Effect of Cash Flow Forecasts on Cost of Debten_US
dc.creatorHinkel, Timothyen_US
dc.contributor.authorHinkel, Timothyen_US
dc.date.issued2013-
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractI examine the impact of the presence and characteristics of equity analysts' cash flow forecasts on cost of debt. I find the presence of cash flow forecasts is associated with a lower cost of debt relative to firm-years with only earnings estimates or neither estimate. I also find cash flow forecast characteristics are associated with cost of debt after controlling for other known determinants of yield spreads. Additional analyses decomposing earnings forecast characteristics into cash flow and accruals components find the cash flow component is associated with cost of debt, but the accruals component is not. Overall, the results indicate that debt market participants find cash flow forecasts useful in reducing information asymmetry and/or providing monitoring, as well as being useful in providing information regarding expected default risk in determining expected returns.en_US
dc.typetexten_US
dc.typeElectronic Dissertationen_US
dc.subjectAccountingen_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorDhaliwal, Danen_US
dc.contributor.advisorSunder, Shyam V.en_US
dc.contributor.committeememberNeamtiu, Monicaen_US
dc.contributor.committeememberDhaliwal, Danen_US
dc.contributor.committeememberSunder, Shyam V.en_US
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