DC Field | Value | Language |
---|---|---|
dc.contributor.author | Jiang, Wenwen | ko |
dc.contributor.author | Kang, Jangkoo | ko |
dc.contributor.author | Kim, Hwa-Sung | ko |
dc.date.accessioned | 2024-02-06T10:00:08Z | - |
dc.date.available | 2024-02-06T10:00:08Z | - |
dc.date.created | 2024-02-06 | - |
dc.date.created | 2024-02-06 | - |
dc.date.created | 2024-02-06 | - |
dc.date.issued | 2024-02 | - |
dc.identifier.citation | The Quarterly Review of Economics and Finance, v.93, pp.176 - 189 | - |
dc.identifier.issn | 1062-9769 | - |
dc.identifier.uri | http://hdl.handle.net/10203/318008 | - |
dc.description.abstract | Incompatible with standard capital structure theories, zero-leverage (ZL) firms are becoming increasingly common in recent decades. In this study, we examine whether shareholders consider a firm's ZL policy value -enhancing or value-reducing. Using Faulkender and Wang's (2006) methodology, we find that shareholders place a positive value on the event of a firm switching to zero debt. Furthermore, this valuation is not affected by whether the firm faces a managerial entrenchment problem, but is affected significantly by whether it is financially constrained before becoming debt-free. We find that shareholders place no value on a financially constrained firm following a ZL policy, but place a positive value on an unconstrained firm doing so, indicating that they only consider the latter as a value-enhancing policy. We also show that our finding still holds even when conducting an event study with short-term event windows. We infer that shareholders' positive valuation on financially unconstrained firms is related to the financial flexibility of ZL policies. | - |
dc.publisher | Elsevier BV | - |
dc.title | Is the zero-leverage policy value-enhancing? | - |
dc.type | Article | - |
dc.identifier.wosid | 001143383600001 | - |
dc.identifier.scopusid | 2-s2.0-85180755613 | - |
dc.type.rims | ART | - |
dc.citation.volume | 93 | - |
dc.citation.beginningpage | 176 | - |
dc.citation.endingpage | 189 | - |
dc.citation.publicationname | The Quarterly Review of Economics and Finance | - |
dc.identifier.doi | 10.1016/j.qref.2023.12.007 | - |
dc.contributor.localauthor | Kang, Jangkoo | - |
dc.contributor.nonIdAuthor | Jiang, Wenwen | - |
dc.contributor.nonIdAuthor | Kim, Hwa-Sung | - |
dc.description.isOpenAccess | N | - |
dc.type.journalArticle | Article | - |
dc.subject.keywordAuthor | Zero -leverage | - |
dc.subject.keywordAuthor | Financial flexibility | - |
dc.subject.keywordAuthor | Financial constraint | - |
dc.subject.keywordAuthor | Managerial entrenchment | - |
dc.subject.keywordPlus | CAPITAL STRUCTURE | - |
dc.subject.keywordPlus | CORPORATE GOVERNANCE | - |
dc.subject.keywordPlus | FINANCIAL FLEXIBILITY | - |
dc.subject.keywordPlus | FIRMS | - |
dc.subject.keywordPlus | DEBT | - |
dc.subject.keywordPlus | OWNERSHIP | - |
dc.subject.keywordPlus | DECISIONS | - |
dc.subject.keywordPlus | BENEFITSMANAGERS | - |
dc.subject.keywordPlus | COSTS | - |
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