Since 2014
International evidence of nexus between positive operating cash activities and cost of debt
Journal of Economic & Financial Studies
View Archive Info| Field | Value | |
| Title |
International evidence of nexus between positive operating cash activities and cost of debt
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| Creator |
Satt, Harit
Ghali, Dr Saadani |
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| Subject |
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Credit ratings, default risk; operating cash position. D78; G20; H11; H73. |
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| Description |
This paper identifies the affiliation between the ending cash balance of the operating section in the cash flow statement and the bonds ratings. Our sample includes 600 companies from 26 countries. The study was conducted over a period of 18 years. An Ordered Probit regression analysis had been applied to identify how the positive cash balance of the operating section in the cash flow statement shapes the probability of escalating the bonds ratings. We find burly proof that the positive operating cash balance considerably affects the bonds ratings. In other words, when a company is able to generate enough cash from its main operating activities, the likelihood of having higher bonds ratings raises; this entails a low cost of debt since higher bond ratings have been proven to lessen the company’s cost for raising funds (in the form of bonds). The results add more confirmation to the creditors’ rights shields and how it affects the cost of debt.
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| Publisher |
LAR Center Press
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| Contributor |
—
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| Date |
2015-08-24
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article — |
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| Format |
application/pdf
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| Identifier |
http://journalofeconomics.org/index.php/site/article/view/82
10.18533/jefs.v3i03.82 |
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| Source |
Journal of Economic & Financial Studies; Vol 3, No 04 (2015): August; 41-49
2379-9471 2379-9463 |
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| Language |
eng
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| Relation |
http://journalofeconomics.org/index.php/site/article/view/82/145
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| Coverage |
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| Rights |
http://creativecommons.org/licenses/by-nc/4.0
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