The Cost of Financial Flexibility: Information Opacity, Agency Conflicts and REIT at-the-Market (ATM) Equity Offerings

《The Cost of Financial Flexibility: Information Opacity, Agency Conflicts and REIT at-the-Market (ATM) Equity Offerings》

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作者: George D. Cashman1, David M. Harrison2, Shelly Howton3 & …Benjamin Scheick

来源: JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS,Vol.volumes-and-issues,Issue66-2,P.

摘要: Using a sample of publicly traded U.S. REITs, we examine the impact of at-the-market (ATM) equity offerings on participating firms’ cost of capital. While ATM programs can improve a firm’s financial flexibility, capital market access, and market timing capabilities, they also may engender agency conflicts and increase the information opacity of the firm’s operations. Consistent with these adverse effects, we document a positive relation between ATM program availability and the implied cost of equity capital. These core findings are most pronounced for firms that are relatively opaque, thus providing further evidence of an information-based channel for the cost of capital effect.