Corporate Deleveraging and Financial Flexibility

• 成果类型: Article
• 署名作者: DeAngelo, Harry; Goncalves, Andrei S.; Stulz, Rene M.
• 署名单位: University of Southern California; University of North Carolina; University of North Carolina Chapel Hill; University System of Ohio; Ohio State University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx147
• 发表日期: 2018
• 页码: 3122
• 关键词: CAPITAL STRUCTURE CHOICE; Dividends; FIRMS; decisions; INFORMATION; earnings; COSTS

摘要

Most firms deleverage from their historical peak market-leverage (ML) ratios to near-zero ML, while also markedly increasing cash balances to high levels. Among 4,476 nonfinancial firms with five or more years of post-peak data, median ML is 0.543 at the peak and 0.026 at the later trough, with a six-year median time from peak to trough and with debt repayment and earnings retention accounting for 93.7% of the median peak-to-trough decline in ML. The findings support theories in which firms deleverage to restore ample financial flexibility and are difficult to reconcile with most firms having materially positive leverage targets.