1. IntroductionModigliani and Mille

1. Introduction
Modigliani and Miller (1958) argue that in a frictionless environment, companies can
fund all value-increasing investment opportunities. That is, investment and growth do not
depend on the availability of internal capital. Once capital market imperfections are introduced, however, firms are not necessarily able to pursue all value-increasing investment opportunities.For example, in the models of Myers and Majluf (1984) and Greenwald, Stiglitz, and Weiss (1984), capital market frictions increase the cost of outside capital relative to internally generated
funds. Consequently, some firms that have attractive growth opportunities invest less than the first-best optimum, leading to lower future growth and reduced operating performance and firm value. One way to mitigate these adverse effects is for firms with high costs of external finance (i.e. financially constrained firms) to rely more on internal financial resources: cash flow and cash holdings.Cash holdings can be valuable when other sources of funds, including cash flows, are insufficient to satisfy firms’ demand for capital.1 That is, firms facing external financing
constraints can use available cash holdings to fund the necessary expenditures. Consistent with this view, several studies report that firms with greater difficulties in obtaining external capital accumulate more cash.2 Similarly, Almeida, Campello, and Weisbach (2004) provide evidence that firms with greater frictions in raising outside financing save a greater portion of their cash flow as cash than do those with fewer frictions.

Kết quả (Việt) 1:

1. IntroductionModigliani and Miller (1958) argue that in a frictionless environment, companies canfund all value-increasing investment opportunities. That is, investment and growth do notdepend on the availability of internal capital. Once capital market imperfections are introduced, however, firms are not necessarily able to pursue all value-increasing investment opportunities.For example, in the models of Myers and Majluf (1984) and Greenwald, Stiglitz, and Weiss (1984), capital market frictions increase the cost of outside capital relative to internally generatedfunds. Consequently, some firms that have attractive growth opportunities invest less than the first-best optimum, leading to lower future growth and reduced operating performance and firm value. One way to mitigate these adverse effects is for firms with high costs of external finance (i.e. financially constrained firms) to rely more on internal financial resources: cash flow and cash holdings.Cash holdings can be valuable when other sources of funds, including cash flows, are insufficient to satisfy firms’ demand for capital.1 That is, firms facing external financingnhững hạn chế có thể sử dụng tiền mặt có sẵn cổ phiếu để tài trợ các chi phí cần thiết. Phù hợp với quan điểm này, một số nghiên cứu báo cáo rằng các công ty với những khó khăn lớn trong việc có được bên ngoài vốn tích lũy thêm cash.2 tương tự như vậy, Almeida, Campello, và Weisbach (2004) cung cấp bằng chứng rằng các công ty với các xích mích lớn trong việc nâng cao bên ngoài tài trợ lưu một phần lớn của dòng tiền mặt như là tiền mặt hơn những người có ít hơn xích mích.