The median U.S. non-regulated firm reports a 47 percent decline in leverage ratio between 1980 and 2010. We investigate whether the cost-benefit tradeoff to shareholders, captured by the valuation impact of an additional dollar of debt on owners' equity, is an explanation for the observed change...

Despite the importance of trade credit as a source of financing there is a significant and persistent decline in this form of short-term borrowing and lending over the 1979 to 2018 interval. We find that the median firm's accounts receivable ratio decreased by 52 percent while accounts payable...

We investigate the motivations for conducting equity issues by examining the value that investors place on cash around the offerings. The marginal value of cash for issuing firms is twice that of non-issuing firms. The higher relative valuation persists subsequent to the issue, indicating that...

We examine the impact of policy uncertainty on trade credit. We document a decline (increase) in accounts payable and receivable during periods of high (low) policy uncertainty. The relation is robust and holds after controlling for endogeneity, economic and political uncertainties, and the...

We provide new evidence on the monitoring benefits from institutional ownership by analyzing the impact of institutional ownership on stock price and operating performance following seasoned equity offerings, a setting where the effects of monitoring are likely to be especially important. We...

I investigate the relationship between declining collateral and increasing low leverage firms by separating it from a reduced propensity to finance with debt. I find that the annual decline in the collateral-to-asset ratio is approximately 1.0% between 1977 and 2010, and that firms with the...

We empirically examine whether the elimination of negative synergies, the reduction of internal capital market inefficiencies, and the mitigation of information problems following spinoffs lower cost of equity. The results indicate that there is no decrease in the cost of equity in the full...

This paper examines whether favorable information conveyed by stock split announcements transfers to non-splitting firms within the same industry. We find that there exists intra-industry reaction; shareholders of non-splitting firms experience significant positive abnormal returns during the...

We investigate the impact of the creation of a new incentive structure for CEOs resulting from firms initiating equity-based compensation (EBC) as a means of paying top executives on firm policy decisions. Contrasting firm stock and operating performance in the period the CEO is compensated with...

We empirically examine whether the elimination of negative synergies, the reduction of internal capital market inefficiencies, and the mitigation of information problems following spinoffs lower cost of equity. The results indicate that there is no decrease in the cost of equity in the full...