H3: Aggregate NCFI has incremental information content to corporate bondholders conditioned on total accruals, aggregate NCFO, and aggregate NCFF.
H4: Aggregate NCFF has incremental information content to corporate bondholders conditioned on total accruals, aggregate NCFO, and aggregate NCFI.
These definitions for NCFO, NCFI, and NCFF, as well as specific Compustat PC Plus data items, are reported in the Appendix.
Hypothesis one examined the association between NCFO and annual holding period returns on corporate bonds, given total accruals, NCFI, and NCFF.
Hypothesis two examined the association between bond returns and total accruals, given NCFO, NCFI, and NCFF.
Variance inflation factors exceeded the rule-of-thumb cutoff of ten for both experimental variables NCFO and TACC, indicating potential problems from multicollinearity (Neter et al.