Financing payouts
We find that 43% of firms that make payouts also raise capital during the same year, resulting in 31% of aggregate payouts being externally financed, primarily with debt. Most financed payouts cannot be explained by payout-smoothing in response to volatile earnings or investment—rather, they are the...
| 主要な著者: | , , |
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| フォーマット: | Journal article |
| 言語: | English |
| 出版事項: |
Cambridge University Press
2024
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| _version_ | 1826312753184243712 |
|---|---|
| author | Farre-Mensa, J Michaely, R Schmalz, M |
| author_facet | Farre-Mensa, J Michaely, R Schmalz, M |
| author_sort | Farre-Mensa, J |
| collection | OXFORD |
| description | We find that 43% of firms that make payouts also raise capital during the same year, resulting in
31% of aggregate payouts being externally financed, primarily with debt. Most financed payouts
cannot be explained by payout-smoothing in response to volatile earnings or investment—rather,
they are the result of firms persistently setting payouts above free cash flow. In fact, 25% of
aggregate payouts could not have been paid without the firms simultaneously raising capital.
Profitable firms with moderate growth use debt-financed payouts to jointly manage their
leverage and cash, thus highlighting the close relationship between payout and capital structure
decisions. |
| first_indexed | 2024-03-07T08:27:23Z |
| format | Journal article |
| id | oxford-uuid:3b6ebe56-6d06-44db-bbeb-ef7ad22cb2dd |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-04-23T23:27:00Z |
| publishDate | 2024 |
| publisher | Cambridge University Press |
| record_format | dspace |
| spelling | oxford-uuid:3b6ebe56-6d06-44db-bbeb-ef7ad22cb2dd2024-04-23T10:08:00ZFinancing payoutsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:3b6ebe56-6d06-44db-bbeb-ef7ad22cb2ddEnglishSymplectic ElementsCambridge University Press2024Farre-Mensa, JMichaely, RSchmalz, MWe find that 43% of firms that make payouts also raise capital during the same year, resulting in 31% of aggregate payouts being externally financed, primarily with debt. Most financed payouts cannot be explained by payout-smoothing in response to volatile earnings or investment—rather, they are the result of firms persistently setting payouts above free cash flow. In fact, 25% of aggregate payouts could not have been paid without the firms simultaneously raising capital. Profitable firms with moderate growth use debt-financed payouts to jointly manage their leverage and cash, thus highlighting the close relationship between payout and capital structure decisions. |
| spellingShingle | Farre-Mensa, J Michaely, R Schmalz, M Financing payouts |
| title | Financing payouts |
| title_full | Financing payouts |
| title_fullStr | Financing payouts |
| title_full_unstemmed | Financing payouts |
| title_short | Financing payouts |
| title_sort | financing payouts |
| work_keys_str_mv | AT farremensaj financingpayouts AT michaelyr financingpayouts AT schmalzm financingpayouts |