DANIEL A. RETTL
Ph.D. Candidate
Vienna Graduate School of Finance
I am a Finance Ph.D. student on the market for 2011-2012. I will be available for interviews at the 2012 AFA meetings in Chicago.
Job Market Paper
Growth Opportunities, Cash Holdings, and Payout Policy.
Research Interests:
Contact Information:
This paper uses a set of natural experiments in U.S. patent
legislation to explore how changes in growth opportunities translate
into adjustments of cash- and payout policy. When faced with a
value-decreasing shock to their portfolio of growth options, firms
respond by reducing their cash holdings. They do so primarily through
increased payouts, and in particular, repurchases of stock. This is
good news in light of agency theories of free cash flow, as it suggests
that managers return cash to shareholders when investment opportunities
decline. On the other side, when a firm's growth opportunities improve,
managers respond by increasing their cash balances alongside their
spendings for research and development. These increases seem to be
partly funded by significant equity issuing. Overall, this paper argues
that the precautionary motive plays a central role for cash policy
decisions of growth firms.
Empirical Corporate Finance
Capital Structure Choice
Cash Holdings and Payout Policy
Managerial Incentives
Vienna Graduate School of Finance
Heiligenstädter Straße 46-48
1190 Vienna, Austria
Email: daniel.rettl [at] vgsf.ac.at