External Financing, Access to Debt Markets, and Stock Returns

Abstract We analyze a firm’s choice between dividends and stock repurchases under heterogeneous beliefs. Firm insiders, owning a certain fraction of equity, choose between paying out cash available through a dividend payment or a stock repurchase, and simultaneously choose the scale of the firm’s project. Outsiders have heterogeneous beliefs about project success and may disagree with insiders. In equilibrium, the firm distributes value through dividends alone, through a repurchase alone, or through a combination of both. In some situations, the firm may raise external financing to fund its payout. We also develop results for long-run stock returns following dividends and repurchases.

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External Financing, Growth and Stock Returns

European Financial Management ◽

10.1111/j.1468-036x.2012.00656.x ◽

2012 ◽

Vol 18 (5) ◽

pp. 790-815 ◽

Cited By ~ 1

Author(s):

Gikas Hardouvelis ◽

Georgios Papanastasopoulos ◽

Dimitrios Thomakos ◽

Tao Wang

Keyword(s):

Stock Returns ◽

External Financing

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Do Asset Pricing Anomalies Have a Common Link? An Empirical Analysis of Interactions among Failure Risk Proxies, External Financing, and Stock Returns

SSRN Electronic Journal ◽

10.2139/ssrn.1364888 ◽

2009 ◽

Author(s):

Julie Fitzpatrick ◽

Joseph P. Ogden

Keyword(s):

Asset Pricing ◽

Stock Returns ◽

Empirical Analysis ◽

External Financing ◽

Failure Risk ◽

Asset Pricing Anomalies ◽

Pricing Anomalies

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Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence

Sustainability ◽

10.3390/su132212894 ◽

2021 ◽

Vol 13 (22) ◽

pp. 12894

Author(s):

Hong Zhao ◽

Zixuan Jiao ◽

Jianrong Wang ◽

Amina Kamar

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Stock Returns ◽

Fixed Effects ◽

Liquidity Risk ◽

External Financing ◽

Firm Characteristics ◽

Liquidity Shocks ◽

Gmm Estimator ◽

Corporate Social

In this study, we empirically investigate whether and to what extent corporate social responsibility (CSR) may affect firm liquidity risk. We define liquidity risk as the covariance between market-wide liquidity shocks and individual firms’ stock returns and employ two methods to estimate firm liquidity risk. We find a negative association between CSR and firm liquidity risk after controlling for various firm characteristics, i.e., year and industry fixed effects. Our results are robust to possible endogeneity issues when we adopt two-stage lease square estimator and dynamic GMM estimator. In addition, we document that the negative relation between CSR and firm liquidity risk is more pronounced when firms have higher reliance on external financing.

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Freedom Indices and Capital Asset Pricing Model: Some Malaysian Evidence

International Journal of Management, Finance and Accounting ◽

10.33093/ijomfa.2020.1.1.1 ◽

2020 ◽

Vol 1 (1) ◽

pp. 1-21

Author(s):

Ying Tay Lee ◽

Devinaga Rasiah ◽

Ming Ming Lai

Keyword(s):

Human Rights ◽

Asset Pricing ◽

Stock Returns ◽

Firm Size ◽

Explanatory Power ◽

Least Square ◽

Press Freedom ◽

Capital Asset Pricing ◽

Capital Asset ◽

Cross Sectional

Human rights and fundamental freedoms such as economic, political, and press freedoms vary widely from country to country. It creates opportunity and risk in investment decisions. Thus, this study is carried out to examine if the explanatory power of the model for capital asset pricing could be improved when these human rights movement indices are included in the model. The sample for this study comprises of 495 stocks listed in Bursa Malaysia, covering the sampling period from 2003 to 2013. The model applied in this study employed the pooled ordinary least square regression estimation. In addition, the robustness of the model is tested by using firm size as a controlled variable. The findings show that market beta as well as the economic and press freedom indices could explain the cross-sectional stock returns of the Malaysian stock market. By controlling the firm size, it adds marginally to the explanation of the extended CAP model which incorporated economic, political, and press freedom indices.

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