Wealth transfers via equity transactions

• 成果类型: Article
• 署名作者: Sloan, Richard G.; You, Haifeng
• 署名单位: University of California System; University of California Berkeley; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.07.001
• 发表日期: 2015
• 页码: 93-112
• 关键词: Equity issuance; Equity repurchase; Wealth transfer; Mispricing; valuation

摘要

Previous research indicates that firms issue shares when their stock is overpriced and repurchase shares when their stock is underpriced. Such transactions transfer wealth from transacting stockholders to ongoing stockholders. We quantify the magnitude of these wealth transfers and analyze their implications. Strikingly, we find that for the average firm-year, these wealth transfers approximate 40% of net income. We also find that these wealth transfers can be predicted using a variety of firm characteristics and that future wealth transfers are an important determinant of current stock prices. (C) 2015 Elsevier B.V. All rights reserved.