search query: @indexterm CASH FLOW / total: 488
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| Author: | Lee, H. Gentry, J. |
| Title: | An empirical study of the corporate choice among common stock, convertible bonds and straight debt: a cash flow interpretation |
| Journal: | Quarterly Review of Economics and Finance
1995 : WINTER, VOL. 35:4, p. 397-420 |
| Index terms: | BONDS DEBT CASH FLOW |
| Language: | eng |
| Abstract: | This study develops the rationale that links a firm's financial health, measured by its cash flow components, to the type of security it offers when raising external capital. Based on the literature associated with the pecking order hypothesis, five empirical hypotheses are presented. The findings show that cash flow components provide fresh insights to the explanation as to why firms choose to offer debt, convertible bonds or common stock. The findings are consistent with the implications of the financial health/pecking order hypothesis. |
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