The value of financial flexibility and corporate financial policy |
| |
| Institution: | 1. Philipps-Universität Marburg, School of Business and Economics, Accounting and Finance Group, Germany;2. Technische Universität München, Department of Financial Management and Capital Markets, Germany;1. Iowa State University, College of Business, Department of Finance, 3224 Gerdin Business Building, Ames, IA 50011, USA;2. Iowa State University, College of Business, Department of Finance, 3344 Gerdin Business Building, Ames, IA 50011, USA;1. New York University, New York, NY, USA;2. Temple University, Philadelphia, PA, USA;3. Securities and Exchange Commission, Washington, DC, USA;1. School of Finance, Guangdong University of Foreign Studies, Guangzhou, P.R. China;2. China Institute of Fortune Management Research, Guangdong University of Foreign Studies, Guangzhou, P.R. China;3. School of Finance, Central University of Finance and Economics |
| |
| Abstract: | We propose a novel approach to measure the value that shareholders assign to financial flexibility. In contrast to existing proxies for financial constraints, our measure is market-based, forward-looking and not directly influenced by past financial decisions. We find that firms for which shareholders consider financial flexibility more valuable have lower dividend payouts, prefer share repurchases to dividends, and exhibit lower leverage ratios. Moreover, these firms tend to accumulate more cash. Our analysis contributes to the growing literature on financial flexibility and indicates that—in line with prior survey evidence—financial flexibility considerations shape corporate financial policy. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
