We demonstrate that sorting stocks on sales seasonality predicts future abnormal returns. A long-short strategy of buying low-sales-season stocks and shorting high-sales-season stocks generates an annual alpha of 8.4%. Further, this strategy has become stronger over time, generating an annual...

Despite Tobin's q nearly doubling since the mid-1970s, the rate of corporate investment has fallen dramatically. We shed light on this paradox by decomposing q into three components relating to valuation, profitability, and asset utilization. This decomposition reveals that investment is...

This paper presents empirical evidence that the recent rise in idiosyncratic risk is driven by the increasing propensity of firms to issue public equity at an earlier stage in their life cycle. We find that the age of the typical firm at its IPO date has fallen dramatically from nearly 40 years...

This paper shows that, contrary to existing evidence, corporate managers cannot successfully time the maturity of their debt issues to reduce their cost of capital. Our results indicate that the negative correlation between future excess long-term bond returns and the ratio of long-term debt...

This paper presents empirical evidence that stock market liquidity is an important determinant of the cost of raising external capital. Because the role of an investment banking syndicate in a public security offering is analogous to that of a block trader, investment banks should charge lower...

One of the most important predictions of the dividend-signaling hypothesis is that dividend changes are positively correlated with future changes in profitability and earnings. Contrary to this prediction, we show that after controlling for the well-known non-linear patterns in the behavior of...

This paper shows that stock market liquidity is an important determinant of the cost of raising external capital. Using 2,387 seasoned equity offerings (SEOs) from 1993-2000, we find that, after controlling for other factors, investment banks charge lower fees to firms with more liquid stocks....

We study how a firm's financial structure affects the intensity with which it competes in the product market. Using a sample of firms that raise significant amounts of capital, we study the extent of their non-price competition, as measured by their advertising expenditures, following this...

There is no consensus in the literature regarding the financial consequences of megamergers in part due to the difficulty in establishing a good counterfactual. By comparing the performance of these deals to the performance of synthetic mergers constructed using a novel matching procedure, we...

This paper presents empirical evidence that fluctuations in idiosyncratic risk are largely driven by the age characteristics of the firms composing the market. Consistent with previous studies, we find that the age of the typical firm at its IPO date has fallen dramatically from nearly 40 years...