Some Companies Delay
Capital Markets Transactions
Capital Markets Transactions
Believing markets will be more receptive later.
And the shareholder reaction easier to manage.
Shareholders understand the need for capital.
They dislike how it is raised and who gets the shares.
Expected
Market
Reaction
Market
Reaction
?
B. Dyson Capital Advisors Dividend Funding Transactions
Observed Market Reaction
Day 1
Cumulative Median
+3.4%
→
Day 1→2
Cumulative Median
+5.1%
→
Day 1→3
Cumulative Median
+7.7%
Cumulative Median Share Price Change Following Dividend Announcement
Stewardship
Shareholders entrust management with their capital.
→
Trust
Financing decisions are a rare window into management’s stewardship of that capital.
→
Credibility
Credibility is built or eroded through actions, not words.
→
Freedom to Execute
Credibility determines the latitude management is given to execute.
→