Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion

@inproceedings{Poulsen1994AssetSF,
  title={Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion},
  author={Annette B. Poulsen and L. Lang and Ren{\'e} M. Stulz},
  year={1994}
}
  • Annette B. Poulsen, L. Lang, René M. Stulz
  • Published 1994
  • Business
  • We argue that management sells assets when doing so provides the cheapest funds to pursue its objectives rather than for operating efficiency reasons alone. This hypothesis suggests that (1) firms selling assets have high leverage and/or poor performance, (2) a successful asset sale is good news and (3) the stock market discounts asset sale proceeds retained by the selling firm. In support of this hypothesis, we find that the typical firm in our sample performs poorly before the sale and that… CONTINUE READING
    555 Citations
    Selling to Buy: Asset Sales and Acquisitions
    • 2
    Corporate Governance and Asset Sales: The Effect of Internal and External Control Mechanisms
    • 31
    • Highly Influenced
    Asset sales and firm strategy: an analysis of divestitures by UK companies
    • 24
    • Highly Influenced
    Valuation Effects for Asset Sales
    • 6
    • Highly Influenced

    References

    SHOWING 1-10 OF 86 REFERENCES
    Asset sales by financially distressed firms
    • 168
    Corporate capital expenditure decisions and the market value of the firm
    • 765
    • PDF
    Liquidation Values and Debt Capacity: A Market Equilibrium Approach
    • 2,507
    • PDF
    The market for interfirm asset sales:Partial sell-offs and total liquidations
    • 341
    • Highly Influential
    Determinants of corporate borrowing
    • 10,752
    • PDF
    Agency Cost of Free Cash Flow, Corporate Finance, and Takeovers
    • 18,745
    • PDF
    Managerial discretion and optimal financing policies
    • 3,226
    • PDF
    Investigating the Valuation Effects of Announcements of Voluntary Corporate Selloffs
    • 253
    • Highly Influential
    The Effect of Voluntary Sell-off Announcements on Shareholder Wealth
    • 306
    • Highly Influential