Agency problems and capital expenditure announcements

Brailsford, T. J. and Yeoh, D. (2004) Agency problems and capital expenditure announcements. Journal of Business, 77 2: 223-256. doi:10.1086/381274

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Author Brailsford, T. J.
Yeoh, D.
Title Agency problems and capital expenditure announcements
Journal name Journal of Business   Check publisher's open access policy
ISSN 0021-9398
Publication date 2004
Sub-type Article (original research)
DOI 10.1086/381274
Open Access Status File (Publisher version)
Volume 77
Issue 2
Start page 223
End page 256
Total pages 34
Editor P. Chintagunta
A. Padanska
A. McGill
M. Newman
R. Thaler
Place of publication Chicago
Publisher University of Chicago Press
Collection year 2004
Language eng
Abstract This article examines the market valuation of announcements of new capital expenditure. Prior research suggests that the firm's growth opportunities and cash flow position condition the market response. This study jointly examines the role of growth and cash flow, and the interaction between them. Using a new data set of Australian firms that avoids problems associated with expectations models, the results are remarkably strong and support a positive association between growth opportunities and the market valuation, in addition to supporting the role of free cash flow. The findings have implications for the relationship between general investment information and stock prices.
Keyword Business
Free Cash Flow
Incremental Information-content
Investment Opportunities
Stock Returns
Ownership Structure
Financing Policies
Transactions Data
Corporate Value
Nyse Stocks
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
2005 Higher Education Research Data Collection
UQ Business School Publications
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 9 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 16 times in Scopus Article | Citations
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Created: Wed, 15 Aug 2007, 03:15:44 EST