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Investment Opportunities, Managerial Decisions, and the Security Issue Decision / Kooyul Jung, Yong-Cheol Kim, Rene M. Stulz.
- Format:
- Book
- Author/Creator:
- Jung, Kooyul.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w4907.
- NBER working paper series no. w4907
- Language:
- English
- Subjects (All):
- Venture capital.
- Private equity.
- Crowd funding.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1994.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1994.
- Summary:
- With agency costs of managerial discretion, equity financing is advantageous for the shareholders of firms with valuable investment opportunities but not for the shareholders of other firms. Accordingly, we find that firms with good investment opportunities are more likely to issue equity than debt, have a smaller abnormal return in absolute value when the issue is announced, and experience substantial asset growth following the issue. Firms that issue equity even though they do not have good investment opportunities experience a larger abnormal return in absolute value when the issue is announced and invest more after the issue than comparable firms that issue debt.
- Notes:
- Print version record
- October 1994.
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