Refi nancing Risk and Cash Holdings.

Abstract: Although a firm's use of shorter-term debt can potentially help it to reduce agency costs of debt and align managers' interests with those of shareholders, the use of this type of debt increases the firm's refinancing risk. We hypothesize that firms with debt that has a shorter maturity hold larger cash reserves to reduce important costs they could incur if they have difficulty refinancing their debt. Using a simultaneous equations framework that accounts for the joint determination of cash holdings and debt maturity, we find that firms that shorten (lengthen) the maturity of their debt increase (decrease) their cash holdings. Additionally, we document that U.S. firms have markedly shortened the maturity of their debt over the 1980-2008 period and that this can explain a large fraction of the increase in the cash holdings of these firms over this period. We also show that the market value of a dollar of cash holdings is higher for firms whose debt has a shorter maturity. Further, the inverse associations between the maturity of a firm's debt with the level and market value of its cash holdings are more pronounced during periods when credit market conditions are tighter and refinancing risk is consequently higher. Finally, we show that larger cash holdings help to mitigate underinvestment problems resulting from refinancing risk. Overall, our findings suggest that refinancing risk is a key determinant of corporate cash holdings

A sub-Mercury-sized exoplanet

Since the discovery of the first exoplanet we have known that other planetary systems can look quite unlike our own. However, until recently we have only been able to probe the upper range of the planet size distribution. The high precision of the Kepler space telescope has allowed us to detect planets that are the size of Earth and somewhat smaller, but no previous planets have been found that are smaller than those we see in our own Solar System. Here we report the discovery of a planet significantly smaller than Mercury. This tiny planet is the innermost of three planets that orbit the Sun-like host star, which we have designated Kepler-37. Owing to its extremely small size, similar to that of Earth's Moon, and highly irradiated surface, Kepler-37b is probably a rocky planet with no atmosphere or water, similar to Mercury.Comment: Accepted and published in Nature (2013 Feb 28). This is the submitted version of paper, merged with the Supplementary Informatio

Comovement and the News

I introduce a novel approach for the empirical analysis of asset price comovement that relates the inter-firm textual similarity of news reports to their equity return correlation. I find that this measure of news similarity is just as important for predicting future cross-firm comovement as contemporaneous return correlation. This predictability remains after controlling for industry correlation, size, book-to-market, momentum, and price-decile correlation, index membership, and headquarters location, as well as institutional holding and analyst coverage. These results contribute to the growing literature examining the role of the media in financial markets, and provide empirical support for an alternative description of return comovement that does not depend on friction-based explanations such as "category," "habitat," or "information diffusion.

DEER TRAIL GROUP IN NORTHEASTERN WASHINGTON: AN INTERMEDIATE MESOPROTEROZOIC AGE UNIT BETWEEN THE WESTERNMOST MESOPROTEROZOIC BELT SUPERGROUP AND THE NEOPROTEROZOIC WINDERMERE GROUP

Mesoproterozoic and Neoproterozoic basins in western North America record the evolving position of the Laurentian craton within two supercontinents during their growth and dismemberment: Columbia (Nuna) and Rodinia. The western-most exposures of the Columbia rift-related Belt–Purcell Supergroup are preserved in northeastern Washington, structurally overlain by the Deer Trail Group and depositionally overlying the Neoproterozoic Windermere Supergroup. It has been disputed whether the Deer Trail Group is correlative with the Belt–Purcell Supergroup, or younger. To help resolve the uncertain correlation of these units and their bearing on supercontinent evolution, we characterized the detrital zircon age populations of units from the Deer Trail Group, the Windermere Supergroup, and the Belt–Purcell Supergroup in northeastern Washington. These data show that the western part of the Columbia supercontinent (now located in Australia and eastern Antarctica) remained attached to western Laurentia and continued to supply 1600–1500 Ma detrital zircon grains to the Belt–Purcell Supergroup until after ca. 1391 Ma. The Deer Trail Group is younger than the Belt–Purcell strata, with the basal unit younger than ca. 1362 Ma and a middle unit younger than ca. 1300 Ma. The Deer Trail Group has a pre-Grenville-age provenance from the southwestern USA and possibly east Antarctica. The Buffalo Hump Formation is younger than the Deer Trail Group, with Grenville-age (ca. 1112 Ma) detrital zircon grains and a detrital zircon signature like that of the overlying Neoproterozoic Windermere Supergroup. We interpret the Deer Trail Group to have been deposited during the rift-demise of supercontinent Columbia and before the Grenville-age assembly of the supercontinent Rodinia.The accepted manuscript in pdf format is listed with the files at the bottom of this page. The presentation of the authors' names and (or) special characters in the title of the manuscript may differ slightly between what is listed on this page and what is listed in the pdf file of the accepted manuscript; that in the pdf file of the accepted manuscript is what was submitted by the author

Haploinsufficiency of Mdm2 and Mdm4 in Tumorigenesis and Development▿

The tumor suppressor p53 is inactivated by multiple mechanisms that include mutations of the p53 gene itself and increased levels of the p53 inhibitors MDM2 and MDM4. Mice lacking Mdm2 or Mdm4 exhibit embryo-lethal phenotypes that are completely rescued by concomitant deletion of p53. Here we show that Mdm2 and Mdm4 haploinsufficiency leads to increased p53 activity, exhibited as increased sensitivity to DNA damage and decreased transformation potential. Moreover, in in vivo tumor development, Eμ-myc Mdm4+/− mice show a delayed onset of B-cell lymphomas compared to Eμ-myc mice. Additionally, Mdm2+/− Mdm4+/− double-heterozygous mice are not viable and exhibit defects in hematopoiesis and cerebellar development. The defects in Mdm2+/− Mdm4+/− mice are corrected by deletion of a single p53 allele. These findings highlight the exquisite sensitivity of p53 to Mdm2 and Mdm4 levels and suggest that some cell types may be more sensitive to therapeutic drugs that inhibit the Mdm-p53 interaction