Show simple item record

dc.contributor.authorLewis, Craig M
dc.contributor.authorTan, Yongxian
dc.date.accessioned2022-08-03T10:19:51Z
dc.date.available2022-08-03T10:19:51Z
dc.date.issued2016
dc.identifier.citationLewis, C.M. and Tan, Y. 2016. Debt-equity choices, R&D investment and market timing. Journal of Financial Economics. 119: pp. 599-610.
dc.identifier.urihttp://hdl.handle.net/20.500.11937/89112
dc.identifier.doi10.1016/j.jfineco.2016.01.017
dc.description.abstract

In this paper, we examine whether managers time their debt-equity choices to exploit market mispricing. Controlling for the level of external financing and corporate investment activities, we find evidence consistent with the market timing hypothesis. We find managers issue more equity relative to debt when analysts are relatively optimistic about firms’ long-term growth prospects. Moreover, equity issuers earn lower returns than debt issuers at subsequent earnings announcements. Controlling for research and development (R&D) investment, we find that, consistent with the market timing hypothesis and inconsistent with the extant empirical literature, the debt-equity composition of external financing predicts year-ahead stock return.

dc.relation.urihttps://www.sciencedirect.com/science/article/pii/S0304405X16000234
dc.titleDebt-equity choices, R&D investment and market timing
dc.typeJournal Article
dcterms.source.volume119
dcterms.source.startPage599
dcterms.source.endPage610
dcterms.source.issn0304-405X
dcterms.source.titleJournal of Financial Economics
dc.date.updated2022-08-03T10:19:51Z
curtin.departmentSchool of Accounting, Economics and Finance
curtin.accessStatusIn process
curtin.facultyFaculty of Business and Law
curtin.identifier.article-number3


Files in this item

FilesSizeFormatView

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record