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Accelerated Share Repurchases, Leonce Bargeron, Manoj Kulchania, Shawn Thomas
Accelerated Share Repurchases, Leonce Bargeron, Manoj Kulchania, Shawn Thomas
Finance Faculty Research and Publications
Accelerated share repurchases (ASRs) are credible commitments by firms to repurchase shares immediately. Including an ASR in a repurchase program reduces the flexibility that firms have to alter an announced program in response to subsequent changes in the price and liquidity of its shares, unexpected shocks to cash flow and/or investment, etc. Thus, we investigate whether firms’ decisions to include ASRs in their repurchase programs are associated with factors expected to influence the costs of lost flexibility and the benefits of enhanced credibility and immediacy. We find robust evidence consistent with the costs of lost flexibility and the benefits of …
The Corporate Choice Between Public Debt, Bank Loans, Traditional Private Debt Placements, And 144a Debt Issues, Matteo Arena
The Corporate Choice Between Public Debt, Bank Loans, Traditional Private Debt Placements, And 144a Debt Issues, Matteo Arena
Finance Faculty Research and Publications
The main purpose of this study is to examine the determinants of the corporate choice between different forms of debt financing. By analyzing the most comprehensive sample of U.S. corporate debt issues to date, I find that firms that issue 144A debt have significantly lower credit quality and higher information asymmetry than firms that issue traditional non-bank private debt. Further, the study shows that traditional private placements, rather than bank loans, are the favorite private debt source for firms with good credit quality. I also show that the firm characteristics of traditional private debt issuers have significantly changed after 1990 …