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Equity Mispricing and Leverage Adjustment Costs
Warr, Richard S. - 2011
We find that equity mispricing impacts the speed at which firms adjust to their target leverage and does so in predictable ways depending on whether the firm is over- or underlevered. For example, firms that are above their target leverage and should therefore issue equity (or retire debt),...
Persistent link: https://www.econbiz.de/10013130668
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The Term Structure of Implied Costs of Equity Capital
Callen, Jeffrey L. - 2018
We model and estimate the term structure of implied costs of equity capital (and implied risk premia) at the firm level for the years 1996-2015 from forward looking option contracts. Empirical tests reject the assumption that the term structure of implied firm-level costs of equity is constant...
Persistent link: https://www.econbiz.de/10012940568
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Banking Competition and Cost of Equity Capital
Liu, Yangke; Yan, Cheng - 2022
Using a large panel of U.S. public firms, we exploit the staggered deregulation of interstate bank branching laws to examine whether banking competition affects the implied cost of equity. We hypothesize that banking competition may result in weakened banks’ ability to access borrower firms’...
Persistent link: https://www.econbiz.de/10013405081
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Corporate Financial Hedging and the Cost of Equity Capital
Ahmed, Hany; Guney, Yilmaz - 2022
Using a large panel of UK public firms, we examine the relationship between the financial risk hedging and the cost of equity capital. We hypothesize that firms utilizing financial derivative instruments reduce the stock return volatility which is priced in investors’ expectations. While...
Persistent link: https://www.econbiz.de/10013305953
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CAPM for estimating the cost of equity capital: Interpreting the empirical evidence
Da, Zhi; Guo, Re-Jin; Jagannathan, Ravi - In: Journal of financial economics 103 (2012) 1, pp. 204-220
Persistent link: https://www.econbiz.de/10009492585
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Shareholder monitoring and discretionary disclosure
Nagar, Venky; Schoenfeld, Jordan - 2021
Theories of delegated monitoring predict that when public disclosure is costly, monitoring by a large investor leads management to supply more private information to that investor, and less public disclosure to other similarly aligned investors who free-ride off the monitor. We test this...
Persistent link: https://www.econbiz.de/10012584426
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A Corporate Finance Cash Flow Model with Float
Apreda, Rodolfo - 2009
In this paper we introduce a Cash Flow Model with Float so as to overcome apparent shortcomings that pervade the Standard Cash Flow Model. We deploy the complex structure the float exhibits and this allows not only for strategic financial decision making but a much more sensible use of sources...
Persistent link: https://www.econbiz.de/10014207871
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Motivated Monitoring by Institutional Investors and Firm Investment Efficiency
Ward, Charles W.R. - 2019
We find that motivated monitoring by institutional investors mitigates firm investment inefficiency, estimated by … type. We also show that closer monitoring mitigates the problem of both over-investing free cash flows and under-investment …
Persistent link: https://www.econbiz.de/10012899694
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Board bias, information, and investment efficiency
Gregor, Martin; Michaeli, Beatrice - 2024
We study how interest alignment between CEOs and corporate boards influences investment efficiency and identify a novel … force behind the benefit of misaligned preferences. Our model entails a CEO who encounters a project, gathers investment …
Persistent link: https://www.econbiz.de/10014506645
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The Effect of Capital Market Concerns on Specific Investments in the Supply Chain
Chen, Hui - 2020
each undertake a relation-specific investment and then bargain over the joint surplus generated by the collaboration. The … surplus. The investments of both firms increase with the retailer's market concerns when the retailer's investment is …'s investment is sufficiently important, both firms invest less, and the retailer suffers as a result of its market concerns. From …
Persistent link: https://www.econbiz.de/10012845940