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We quantify how much nonfundamental movements in stock prices affect firm decisions. We estimate a dynamic investment model in which firms can finance with equity or cash (net of debt). Misvaluation affects equity values, and firms optimally issue and repurchase overvalued and undervalued...
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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....
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Employee compensation may impact payout policy by (i) incentivizing managers with non-dividend-protected options to … dividend-protection and dilution channels imply a positive relation between stock options and repurchases. Yet, recent studies … dilution channel; dividend protection has no first-order effect on payout. Difference-in-differences analyses using a shock to …
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