A Survey of the Literature on the Influence of Operating Risk (Cash Flow Volatility) on Capital Structure

DOI

10.2991/aebmr.k.220405.337How to use a DOI?

Keywords

operating risk; cash flow volatility; capital structure

Abstract

The paper aims to give direct evidence that operational risk (cash flow volatility) will continue being a vital negative ascertainment of investment even after managing the means of approaching capital externally. Further, the volatility of cash flow raises these costs. Volatility cash flow is linked to small dividend payout ranking, lower analyst following, higher weighted average prices of capital, bigger bid-ask spreads, worse S&P bond scaling, and higher yields-to-maturity. The results linked to capital costs, the importance of cash flow volatility, and investment decision looking at the costs mean that the investment sensitivity to volatility does not result as volatility is an agent for risk project. Moreover, cash flow volatility is generally linked to investment as it raises the possibility that an entity will require market capital. It also raises the costs of doing so.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

Download article (PDF)

TY  - CONF
AU  - Ziqi Zhou
AU  - Yihong Tong
AU  - Weiqi Ren
PY  - 2022
DA  - 2022/04/29
TI  - A Survey of the Literature on the Influence of Operating Risk (Cash Flow Volatility) on Capital Structure
BT  - Proceedings of the 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022)
PB  - Atlantis Press
SP  - 2012
EP  - 2016
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220405.337
DO  - 10.2991/aebmr.k.220405.337
ID  - Zhou2022
ER  -