Inaugural Lecture: Yilmaz Guney, Professor of Finance

Recent developments in cash decisions with reference to cash holdings, dividends and share buybacks.

Managing and maintaining corporate cash balances is one of the critical aspects of managerial decision-making as it has important implications for firm-level risk and market value creation.

The main sources of cash holdings are via the core operations of the corporations and the financing they raise in the money and capital markets. In order to increase firm value, managers are expected to invest in value-enhancing projects. After expenses and capital expenditure are paid, firms can still have some cash leftover, which is known as free cash flows. A firm can retain free cash flows to add to internal cash reserves but it is important to figure out how much cash to hold relative to the asset base of the firm. Further, the free cash flows can be distributed to the shareholders as cash dividends; they can be used to repurchase the stocks from the existing shareholders or to retire their debt. Alternatively, companies can use the cash to invest in profitable projects with expected positive net present values.

The objective of this lecture is to examine the factors that influence the firms’ top management team in dealing with corporate cash holdings. Whether the firms hoard cash, buyback shares, retire debt or pay cash dividends is all value relevant. This lecture covers the main issues established in the literature and investigates the very recent developments in the area by referring to both the academic literature and the business world.

At the end of the lecture, the audience will be informed about optimal decision-making related to cash policies and investment decisions.

Dr. Guney is a Professor of Finance at Coventry University’s Centre for Financial and Corporate Integrity (CFCI). Prior to joining Coventry University, Yilmaz held senior academic positions at the University of Hull and University of Surrey.

He has over 20 years’ experience in teaching and supervision for undergraduate, postgraduate, Executive MBA and PhD programmes with a focus on accounting, econometrics and finance. Dr. Guney holds a first degree in economics, and M.Sc. and PhD. degrees in finance. He also holds senior fellowship at the Higher Education Academy (HEA) and the professional qualification of Certified in Quantitative Risk Management (CQRM).

Dr Guney has published his work in international journals including Journal of Financial and Quantitative Analysis, Journal of Corporate Finance, British Journal of Management, Journal of the Operational Research Society, European Financial Management, International Review of Financial Analysis, and Review of Quantitative Finance and Accounting. He is the European editor of the International Journal of Behavioural Accounting and Finance and the associate editor of Journal of Management and Development Dynamics (Tanzania).

Whilst his main research area spans corporate finance, corporate governance and behavioural finance, Dr Guney has also provided consultancy for some private firms in the area of risk management and corporate performance.