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CF article McLean, R.D. (2011). Share issuance and cash savings, Journal of Financial Economics

4 important questions on CF article McLean, R.D. (2011). Share issuance and cash savings, Journal of Financial Economics

What is the hypothesis of the article of McLean "Share issuance and cash savings"

Firms issue and save when costs are low, so that they do not have to issue when costs are high.

What are the main results of the article of McLean "Share issuance and cash savings"?

Precautionary cash savings have become the primary use of share issuance proceeds
Precautionary cash savings has not been previously suggested as a motivation for share issuance.
The results in this paper are inconsistent with market timing theories, which imply a negative relation between share issuance-cash savings and post-issuance stock returns
Share issuance-cash savings are best explained by precautionary motives and do not share a negative relation with post-issuance stock returns (Rendement na uitgifte)

What are the main findings of this table?

Overall, the results in Table 3 show that over the last 38 years, Issue has become the primary source of cash savings for firms, while Cash flow has become the secondary source.

What are the main findings of the table?

Table 8 show that the relations between issue and market-to-book, Leverage, and PPE are positive. This means that firms with high share prices, high leverage, and fewer assets that can be easily converted to cash issue more shares. The relationsbetweenIssueandCash flowandAssetsare negative, showing that smaller and less profitable firms issue more shares.The effect ofPREConIssueis both statistically significant and economically meaningful