文档介绍：本科毕业论文(设计)
外文翻译
原文:
The Value of Financial Flexibility
We develop a model that endogenizes dynamic financing, investment, and cash retention/payout policies in order to analyze the effect of financial flexibility on firm value. We show that the value of financing flexibility depends on the costs of external financing, the level of corporate and personal tax rates that determine the effective cost of holding cash, the firm’s growth potential and maturity, and the reversibility of capital. Through simulations, we demonstrate that firms facing financing frictions should simultaneously borrow and lend, and we examine the nature of dynamic debt and liquidity policies and the value associated with corporate liquidity.
Recent surveys of American and European CFOs suggest that the most important driver of firms’ capital structure decisions is the desire to attain and preserve financial flexibility. Financial flexibility represents the ability of a firm to access and restructure its financing at a low cost. Financially flexible firms are able to avoid financial distress in the face of negative shocks, and to when profitable opportunities arise. While a firm’s financial flexibility depends on external financing costs that may reflect firm characteristics such as size, it is also a result of strategic decisions made by the firm related to capital structure, liquidity, and investment. In this paper, we explore how firms should optimally manage their financial flexibility in the face of various transaction costs and taxes, and in turn examine the value of financial flexibility under different conditions.
We particularly focus on the strategic management of corporate liquidity and its relationship with the firm’s financing and investment policies. A pervasive, and perhaps puzzling, aspect of corporate financial policy is that most firms that employ debt financing simultaneously hold cash balances. While equivalent borrowing and lending positions offset each other from a tax