This paper tests Jensen (1986)'s free cash flow hypothesis using data on real estate transactions. We find that firms with either higher free cash flow or higher cash reserve pay more for real estate, which is consistent with the free cash flow hypothesis. We also find that the agency costs of...

In response to the recent financial crisis, the U.S. Government introduced new rules which allow REITs to issue elective stock dividends (ESD) to satisfy their distribution requirements. The goal of these rules was to provide temporary relief to REITs facing cash flow problems. We investigate...

In response to the recent financial crisis, the U.S. Government introduced new rules which allow REITs to issue elective stock dividends, i.e., non-cash dividends, to satisfy their distribution requirements. The purported goal of these rules was to provide temporary relief to REITs facing cash...