Corporate Cash Shortfalls and Financing Decisions

• 成果类型: Article
• 署名作者: Huang, Rongbing; Ritter, Jay R.
• 署名单位: University System of Georgia; Kennesaw State University; State University System of Florida; University of Florida
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa099
• 发表日期: 2021
• 页码: 1789
• 关键词: capital structure; flexibility; INVESTMENT

摘要

Given their actual revenue and spending, most net equity issuers and an overwhelming majority of net debt issuers would face immediate cash depletion without external financing. Debt issuers tend to have short-lived cash needs, while equity issuers often have persistent cash needs. On average, debt issuers immediately spend almost all of the proceeds, while equity issuers retain much of the proceeds in cash. Anticipated near-future cash needs and fixed costs of financing help explain the fraction of the proceeds being retained. Our findings support a funding-horizon theory in which cash needs and the nature of cash needs motivate financing decisions.