TIMING, INVESTMENT OPPORTUNITIES, MANAGERIAL DISCRETION, AND THE SECURITY ISSUE DECISION

Authors
JUNG KY KIM YC STULZ RM
Citation
Ky. Jung et al., TIMING, INVESTMENT OPPORTUNITIES, MANAGERIAL DISCRETION, AND THE SECURITY ISSUE DECISION, Journal of financial economics, 42(2), 1996, pp. 159-185
Citations number
40
Categorie Soggetti
Economics,"Business Finance
Journal title
Journal of financial economics → ACNP
ISSN journal
0304405X
Volume
42
Issue
2
Year of publication
1996
Pages
159 - 185
Database
ISI
SICI code
0304-405X(1996)42:2<159:TIOMDA>2.0.ZU;2-5
Abstract
This paper investigates the ability of the pecking-order model, the ag ency model, and the timing model to explain arms' decisions whether to issue debt or equity, the stock price reaction to their decisions, an d their actions afterward. We find strong support for the agency model . Firms often depart from the pecking order because of agency consider ations. We fail to find support for the timing model.