Publication Type

Journal Article

Version

submittedVersion

Publication Date

2-2021

Abstract

We assume executives managing corporate financial policy consider the firm's current and target leverage, investment plans, anticipated cash flows, and consequences of alternative sequences of financing transactions, operating within efficient markets. Our analysis yields time-series and cross-sectional predictions for management of investment spending and leverage; use of maturity, priority, and convertibility covenants; and management of dividends, share repurchases, cash balances, and credit lines. Our evidence from 8608 SEOs covering 1970–2015 is consistent with implications of our theory, helps to resolve an array of issues in corporate finance, and offers a step toward a more unified analysis of rational corporate financial management.

Keywords

Capital structure, Seasoned equity offerings, Financial management, Tradeoff, Pecking-order, Market-timing

Discipline

Corporate Finance | Finance and Financial Management

Research Areas

Finance

Publication

Journal of Corporate Finance

Volume

66

First Page

1

Last Page

29

ISSN

0929-1199

Identifier

10.1016/j.jcorpfin.2020.101700

Publisher

Elsevier

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.jcorpfin.2020.101700

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