AuthorGeile, Amy Lynn
AdvisorDhaliwal, Dan S
Committee ChairDhaliwal, Dan S
MetadataShow full item record
PublisherThe University of Arizona.
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.
AbstractI decompose operating cash flow into two components, unmanaged operating cash flow and managed operating cash flow, to examine the association between managed operating cash flow and the cost of debt. For all firms the results suggest the cost of debt has a significant negative association with both components of operating cash flow, however, the managed component is less negative. Also, when firms are likely to engage in cash flow management and bondholders have increased incentives to scrutinize firm information, the bond market positively prices managed operating cash flow information. Specifically, my findings report a positive association between managed operating cash flows and the cost of debt when firms use cash flow management to meet the zero operating cash flow benchmark. Also, I find a more pronounced positive association between managed operating cash flows for a group of distressed firms.