search query: @indexterm Capital expenditure / total: 53
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| Author: | Beatty, R. Riffe, S. Welch, I. |
| Title: | How firms make capital expenditure decisions: Financial signals, internal cash flows, income taxes and the Tax Reform Act of 1986 |
| Journal: | Review of Quantitative Finance and Accounting
1997 : OCT, VOL. 9:3, p. 227-250 |
| Index terms: | CAPITAL EXPENDITURE DECISION MAKING RETURN ON INVESTMENT EARNINGS INCOME TAX |
| Language: | eng |
| Abstract: | This study explores three general categories of factors expected to affect investment: external equity financing, internally generated accounting information, and tax incentives. It was found that external financing and information plays a role that in that both positive stock returns and equity issuances indicate future increases in investment. High stock prices not only lower the cost of capital, but also signal good investment opportunities. Accounting information about internal sources and uses of funds are also important in the investment decision. Positive changes in available cash liquidity also motivate future investment. |
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