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Modeling Managers As EPS Maximizers
Ben-David, Itzhak; Chinco, Alexander M. - National Bureau of Economic Research - 2023
Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, real-world firm managers consistently say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take firm managers...
Persistent link: https://www.econbiz.de/10014250143
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Modeling Managers As EPS Maximizers
Ben-David, Itzhak; Chinco, Alex - 2023
Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, the people running large public corporations say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take...
Persistent link: https://www.econbiz.de/10014351328
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Equity Market Misvaluation, Financing, and Investment
Warusawitharana, Missaka - 2014
We estimate a dynamic investment model in which firms finance with equity, cash, or debt. Misvaluation affects equity values, and firms optimally issue and repurchase overvalued and undervalued shares. The funds flowing to and from these activities come from investment, dividends, or net cash....
Persistent link: https://www.econbiz.de/10013065520
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Leveraged Share Repurchase : A Tax-Based Explanation
Moser, William J. - 2018
more favorable for firm distributions of funds to shareholders through stock repurchases, firms are more likely to … percentage of shareholders qualify for preferential long-term capital gains. In contrast, I find that a firm is less likely to … short-term institutional shareholders. Overall, my results support the notion that corporate and shareholder-level taxes …
Persistent link: https://www.econbiz.de/10012908407
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Capital Structure Management by Share Repurchase for Companies in Emerging Markets
Kulik, Julia - 2019
According to foreign research into developed markets, share repurchasing influences the speed of adjustment of companies' capital structure to the target level. It is worth noting that the number of such research studies for emerging markets is rather small.On the basis of an empirical study of...
Persistent link: https://www.econbiz.de/10012891298
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Leveraged Buybacks
Lei, Zicheng - 2017
enabling firms to optimize their leverage, on average benefiting shareholders. The benefits decrease with a firm's leverage ex …
Persistent link: https://www.econbiz.de/10012972465
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Do Share Repurchases Facilitate Movement Towards Target Capital Structure? International Evidence
Wang, Zigan; Yin, Qie Ellie; Yu, Luping - 2021
We use a new international setting to test and strengthen the identification of “target leverage hypothesis” in the payout policy literature. We conduct a quasi-natural experiment induced by staggered share repurchase legalization in 17 economies and analyze its influences on leverage...
Persistent link: https://www.econbiz.de/10013223019
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Outlasting the Pandemic : Corporate Payout and Financing Decisions During COVID-19
Pettenuzzo, Davide; Sabbatucci, Riccardo; Timmermann, Allan - 2021
The outbreak of the Covid-19 pandemic massively increased uncertainty about firms’ cash flows and their access to financial markets. We examine its effect on firms’ strategies for preserving cash by suspending dividends and buybacks and raising new funds through bond and equity issues. We...
Persistent link: https://www.econbiz.de/10013233950
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Capital Structure, Equity Mispricing, and Stock Repurchases
Bonaime, Alice A. - 2014
We evaluate motives for share repurchases using a unified framework where a firm has a target capital structure and has equity that can be mispriced. We document that capital structure adjustments are a value-increasing motive for repurchases and that the extent to which adjusting capital...
Persistent link: https://www.econbiz.de/10013063350
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Who cares? : corporate governance in today's equity markets
Isaksson, Mats; Çelik, Serdar - 2013
There are two main sources of confusion in the public corporate governance debate. One is the confusion about the role of public policy intervention. The other is a lack of empirical knowledge about the corporate landscape where rules are supposed to be implemented and the functioning of...
Persistent link: https://www.econbiz.de/10009775539