1 option
How Valuable is Financial Flexibility when Revenue Stops? Evidence from the COVID-19 Crisis / Rüdiger Fahlenbrach, Kevin Rageth, René M. Stulz.
- Format:
- Book
- Author/Creator:
- Fahlenbrach, Rüdiger.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27106.
- NBER working paper series no. w27106
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- Firms with greater financial flexibility should be better able to fund a revenue shortfall resulting from the COVID-19 shock and benefit less from policy responses. We find that firms with high financial flexibility experience a stock price drop lower by 26% or 9.7 percentage points than those with low financial flexibility accounting for a firm's industry. This differential return persists as stock prices rebound. Similar results hold for CDS spreads. The stock price of a firm with an average payout over assets ratio would have dropped 2 percentage points less with no payouts for the last three years.
- Notes:
- Print version record
- May 2020.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.