Potential dividends and actual cash flows. Theoretical and empirical reasons for using ‘actual’ and dismissing ‘potential’, Or: How not to pull potential rabbits out of actual hats
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References listed on IDEAS
- Richard S Ruback, 2002. "Capital Cash Flows: A Simple Approach to Valuing Risky Cash Flows," Financial Management, Financial Management Association, vol. 31(2), Summer.
- James E. Smith & Robert F. Nau, 1995. "Valuing Risky Projects: Option Pricing Theory and Decision Analysis," Management Science, INFORMS, vol. 41(5), pages 795-816, May.
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- Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
- Lee Pinkowitz & Rene M. Stulz & Rohan Williamson, 2003. "Do Firms in Countries with Poor Protection of Investor Rights Hold More Cash?," NBER Working Papers 10188, National Bureau of Economic Research, Inc.
- Varian, Hal R, 1987. "The Arbitrage Principle in Financial Economics," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 55-72, Fall.
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More about this item
KeywordsCash flows; cash flow to equity; free cash flow; liquid assets; potential dividends; firm value; equity value; Modigliani and Miller; levered value; error in valuation;
- M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
- M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
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