Earticle

초록

영어

This study investigates firms’ capital structure decisions around significant drops in stock price. We present evidence that firms usually repurchase equity to boost stock prices following these shocks, rather than retiring debt to rebalance their capital structures, even though buybacks cause their capital structures to deviate farther from the previous levels. Our results also show that firms that are less exposed to costs related to financial distress (e.g., those with high cash holdings or almost zero leverage) and those whose managers’ compensation depends heavily on stock returns are more likely to repurchase shares after stock price shocks than are other firms. These results indicate that managerial incentives and firms’ historical financial policies play more important roles in determining how firms react to stock price shocks than do managers’ desires to maintain optimal leverage.

목차

Abstract
 I. Introduction
 II. Data, Variables and Methodology
  A. Data
  B. Variables
  C. Methodology
 III. Empirical Results
  A. Summary Statistics
  B. Firms’ financing behavior
  C. Sub-sample summary statistics
  D. Repurchasing firm characteristics
  E. Regression Results
  F. Robustness – Logit Regression
 IV. Conclusion
 Appendix
 Reference
 Table

저자

• Hae Jin Chung [ Korea Advanced Institute of Science and Technology (KAIST) ]
• Sung Won Seo [ Dongguk Business School, Dongguk University ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330