Why do firms issue equity?

• 成果类型: Article
• 署名作者: Dittmar, Amy; Thakor, Anjan
• 署名单位: University of Michigan System; University of Michigan; Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2007.01200.x
• 发表日期: 2007
• 页码: 1-54
• 关键词: SEASONED EQUITY; capital structure; cross-section; STOCK; performance; INVESTMENT; earnings; INFORMATION; opinion; decisions

摘要

We develop and test a new theory of security issuance that is consistent with the puzzling stylized fact that firms issue equity when their stock prices are high. The theory also generates new predictions. Our theory predicts that managers use equity to finance projects when they believe that investors' views about project payoffs are likely to be aligned with theirs, thus maximizing the likelihood of agreement with investors. Otherwise, they use debt. We find strong empirical support for our theory and document its incremental explanatory power over other security-issuance theories such as market timing and time-varying adverse selection.