Financing Decisions: Who Issues Stock?

39 Pages Posted: 13 Aug 2003  

Eugene F. Fama

University of Chicago - Finance

Kenneth R. French

Tuck School of Business at Dartmouth; National Bureau of Economic Research (NBER)

Date Written: April 2004

Abstract

Financing decisions seem to violate the central predictions of the pecking order model about how often and under what circumstances firms issue equity. Specifically, most firms issue or retire equity each year, the issues are on average large, and they are not typically done by firms under duress. We estimate that during 1973-2002 the year-by-year equity decisions of more than half of our sample firms violate the pecking order. And contradictions are more common among larger firms.

Suggested Citation

Fama, Eugene F. and French, Kenneth R., Financing Decisions: Who Issues Stock? (April 2004). CRSP Working Paper No. 549. Available at SSRN: https://ssrn.com/abstract=429640 or http://dx.doi.org/10.2139/ssrn.429640

Eugene F. Fama

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7282 (Phone)
773-702-9937 (Fax)

Kenneth R. French (Contact Author)

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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