Journal ArticleDOI
Common stock offerings across the business cycle
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In this article, the authors show that firms selling seasoned equity when they face lower adverse selection costs, which occurs in periods with more promising investment opportunities and with less uncertainty about assets in place, are predicted to convey less adverse information about equity values.About:
This article is published in Journal of Empirical Finance.The article was published on 1993-06-01. It has received 547 citations till now. The article focuses on the topics: Equity (finance) & Common stock.read more
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The New Issues Puzzle
Tim Loughran,Jay R. Ritter +1 more
TL;DR: In this paper, the authors show that companies issuing stock during 1970 to 1990, whether an initial public offering (IPO) or a seasoned equity offering (SEO), significantly underperform relative to nonissuing firms for five years after the offering date.
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Market Timing and Capital Structure
Malcolm Baker,Jeffrey Wurgler +1 more
TL;DR: In this paper, the authors show that current capital structure is strongly related to historical market values, and that firms are more likely to issue equity when their market values are high, relative to book and past market values.
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The great reversals: the politics of financial development in the twentieth century
Raghuram G. Rajan,Luigi Zingales +1 more
TL;DR: In this paper, the authors propose an interest group theory of financial development where incumbents oppose financial development because it breeds competition. And the theory predicts that incumbents’ opposition will be weaker when an economy allows both cross-border trade and capital flows.
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Capital Structure Decisions: Which Factors Are Reliably Important?
Murray Z. Frank,Vidhan K. Goyal +1 more
TL;DR: This article examined the relative importance of many factors in the capital structure decisions of publicly traded American firms from 1950 to 2003 and found that the most reliable factors for explaining market leverage are: median industry leverage, market-to-book assets ratio (−), tangibility (+), profits (−), log of assets (+), and expected inflation (+).
Journal ArticleDOI
The Great Reversals: The Politics of Financial Development in the 20th Century
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors propose an interest group theory of financial development where incumbents oppose financial development because it breeds competition, and the theory predicts that incumbents' opposition will be weaker when an economy allows both cross-border trade and capital flows.
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Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
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Corporate financing and investment decisions when firms have information that investors do not have
TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
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Determinants of corporate borrowing
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
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Why Does Stock Market Volatility Change Over Time
TL;DR: The authors analyzes the relation of stock volatility with real and nominal macroeconomic volatility, economic activity, financial leverage, and stock trading activity using monthly data from 1857 to 1987, finding that stock return variability was unusually high during the 1929-1939 Great Depression.