Overconfidence CFOs and Firm Performance

• Main Authors: JI, HONG-JHENG, 紀洪政
• Other Authors: CHOU, SHU-CHING
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/e85psv

碩士 === 國立雲林科技大學 === 財務金融系 === 106 === Literature show that overconfidence executives may lead to the distortions of corporate investment. Overconfident executives overestimate their return of the investment projects and think external funds as overpricing. Therefore, they overinvest when they have sufficient internal funds but reduce investment if they need to request external fund. By using the sample of S&P 500 firms, this study investigates the relation of overconfident CFOs and investment. The CFOs are regarded as overconfident if they hold in-the-money options. The results show that overconfident CFOs overinvest and have higher cash-flow investment sensitivity.