Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/14457
Title: Financing decisions of U.S. REITs: A capital market perspective
Authors: LI LIN
Keywords: US REITs; Financing Decisions; Market Timing; Capital Structure; Corporate Finance
Issue Date: 20-Dec-2004
Source: LI LIN (2004-12-20). Financing decisions of U.S. REITs: A capital market perspective. ScholarBank@NUS Repository.
Abstract: This thesis studies the financing decisions of U.S. REITs from a capital market perspective, with an emphasis on their market-timing behavior.Specifically, we find that REITs time their equity offering with periods of buoyant valuation and sharp run-ups in the stock price in the market, and issue debt securities when the long-term rate is low and the credit spread is narrow, while both debt and equity securities are offering when investors are more risk-averse. In addition, REITs also time debt market conditions by means of debt-maturity choices: choosing long-term debt over short-term ones when long-term rate and credit-spread is low, and current term spread is high.We conclude that market-timing hypothesis better describe REITs financing activities than either the trade-off theory or the pecking-order hypothesis. Further, these evidences about market-timing from a particular industry which is a superior testing ground provide strong empirical support to the development of market-timing theory.
URI: http://scholarbank.nus.edu.sg/handle/10635/14457
Appears in Collections:Master's Theses (Open)

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