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Full-Text Articles in Business
Shareholder Returns From Supplying Trade Credit, Matthew D. Hill, G. Wayne Kelly, G. Brandon Lockhart
Shareholder Returns From Supplying Trade Credit, Matthew D. Hill, G. Wayne Kelly, G. Brandon Lockhart
Department of Finance: Faculty Publications
We examine shareholder wealth implications of supplying financing to customers. Robust results demonstrate that excess returns and trade receivables are directly and significantly related. Further evidence indicates the value of receivables is higher for suppliers with stronger motives relating to operating and contracting costs. The results also suggest a discounted value of receivables for financially unconstrained firms. Overall, we conclude that investors recognize trade credit as an effective instrument in mitigating frictions hindering sales growth. Thus, certain suppliers are positioned to derive increased strategic benefits from credit policy.
Heterogeneous Beliefs And Risk Neutral Skewness, Geoffrey C. Friesen, Yi Zhang, Thomas Zorn
Heterogeneous Beliefs And Risk Neutral Skewness, Geoffrey C. Friesen, Yi Zhang, Thomas Zorn
Department of Finance: Faculty Publications
This study tests whether investor belief differences affect the cross-sectional variation of risk-neutral skewness, using data on firm-level stock options traded on the CBOE from 2003 to 2006. Using well known proxies for heterogeneous beliefs, we find that stocks with greater belief differences have more negative skews, even after controlling for systematic risk and other firm-level variables known to affect skewness. This result also goes beyond the net price pressure hypothesis suggested by Bollen and Whaley (2004). Factor analysis identifies latent variables linked to systematic risk and belief differences. The belief factor explains more variation in the risk-neutral density than …