Agency cost of free cash flow, capital allocation, and payouts

• 成果类型: Article
• 署名作者: DeAngelo, Harry; Kahle, Kathleen; Skinner, Douglas J.
• 署名单位: University of Southern California; University of Arizona; University of Chicago
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2025.104117
• 发表日期: 2025
• 关键词: Capital allocation; free cash flow; Payouts; Politicization of finance

摘要

Jensen's (1986) analysis of the agency costs of free cash flow radically transformed our understanding of corporate payout policy. This paper details the main pre-Jensen advances in the payout literature, explains how his analysis profoundly altered the way financial economists view payout policy, and discusses prominent regularities that provide real-world texture for understanding the importance of his insights about payout policy. These regularities include: (i) the dominance (measured as a percent of value or earnings) of the public equity markets by firms in the distribution phase of the corporate lifecycle; (ii) changes since the 1980s in aggregate cash payouts, the profitability of payers, payout rates, and the set of firms that dominate the payout supply; and (iii) the recent politicization of share repurchases.