Dong, Ming; Hirshleifer, David; Teoh, Siew Hong - In: Review of Financial Studies 25, 12, pp. 3645-3683
We test whether and how equity overvaluation affects corporate financing decisions using an ex ante misvaluation measure that filters firm scale and growth prospects from market price. We find that equity issuance and total financing increase with equity overvaluation, but only among overvalued...
