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Consumption Risk and the Cost of Equity Capital

Jagannathan, Ravi - 2005

We demonstrate, using data for the period 1954-2003, that differences in exposure to consumption risk explains cross sectional differences in average excess returns (cost of equity capital) across the 25 benchmark equity portfolios constructed by Fama and French (1993). We use yearly returns on...

Persistent link: https://www.econbiz.de/10012467661

Cross-Border Valuation : The International Cost of Equity Capital

Bodnar, Gordon M. - 2003

How does a firm in one country evaluate an investment in a firm in another country, or how does it evaluate a foreign …

Persistent link: https://www.econbiz.de/10012468579

Costs of Equity Capital and Model Mispricing

Pastor, Lubos - 1998

Costs of equity for individual firms are estimated in a Bayesian framework using several factor-based pricing models. Substantial prior uncertainty about mispricing often produces an estimated cost of equity close to that obtained with mispricing precluded, even for a stock whose average return...

Persistent link: https://www.econbiz.de/10012472312

Equity is Cheap for Large Financial Institutions : The International Evidence

Gandhi, Priyank - 2016

In most countries, equity is a cheap source of funding for a country's largest financial institutions. On average, the stocks of the top 10% financial companies in a country account for over a quarter of total market capitalization, but these stocks earn returns that are significantly lower than...

Persistent link: https://www.econbiz.de/10012456321

External Equity Financing Shocks, Financial Flows, and Asset Prices

Belo, Frederico - 2014

book-to-market, investment, and size portfolios. We propose a dynamic investment-based model with stochastic equity …, real quantities, and financing flows. In the model, growth firms, high investment firms, and large firms, can substitute …

Persistent link: https://www.econbiz.de/10012458455

Does Financial Constraint Affect Shareholder Taxes and the Cost of Equity Capital?

Chen, Chongyang - 2011

We show that firms with the least elastic demand for equity capital should benefit the most from reductions in shareholder taxes. Consistent with this prediction, we find that, following 1997 and 2003 cuts in U.S. individual shareholder taxes, financially constrained firms, and particularly...

Persistent link: https://www.econbiz.de/10012461488

Fiduciary Duties and Equity-Debtholder Conflicts

Becker, Bo - 2011

vicinity of financial distress. We show that this ruling increased the likelihood of equity issues, increased investment, and …

Persistent link: https://www.econbiz.de/10012460996

Do Debt Flows Crowd Out Equity Flows Or the Other Way Round?

Razin, Assaf - 2000

In the presence of asymmetric information, the stage at which financing decisions are made about investment projects in … channeling savings into investment. This paper compares the implications of two extreme cases regarding the information possessed …

Persistent link: https://www.econbiz.de/10012471014

Motivations for Public Equity Offers : An International Perspective

Kim, Woojin - 2005

This paper examines the extent to which investment financing and market-timing explanations motivate public equity … one motive for the equity offer being to raise capital for investment. However, firms also hold onto much of the cash they …. These results suggest that market timing as well as investment financing is a motivation for equity offers …

Persistent link: https://www.econbiz.de/10012466874

The changing roles of debt and equity in financing US capital formation

Friedman, Benjamin M. (ed.) - 1982

Persistent link: https://www.econbiz.de/10013480806

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