Executive Takeaways
■ Over 10% of all firm-years were preceded by at least 3 external debt or equity financings. ■ Firms with no external financing for 3 years had an average return of 21.1% the next year. ■ Following at least 3 external financings, the average annual return was only 4.9%. ■ Following at least 3 external equity financings, the average annual return was only -8.3%.
Rongbing Huang, Professor of Finance
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