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The influence of the stock market on corporate investment
This paper investigates how corporate investment is influenced by the non-fundamental component of stock prices. Previous research conducted has found that investment is sensitive to equity mispricing where both the stock is undervalued and the firm is dependent on equity. Under these conditions the...
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| Format: | Thesis |
| Language: | English |
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Department of Finance and Tax
2016
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| _version_ | 1867613160647688192 |
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| access_status_str | Open Access |
| author | Armand, Rayanne |
| author2 | West, Darron |
| author_browse | Armand, Rayanne West, Darron |
| author_facet | West, Darron Armand, Rayanne |
| author_sort | Armand, Rayanne |
| collection | Thesis |
| description | This paper investigates how corporate investment is influenced by the non-fundamental component of stock prices. Previous research conducted has found that investment is sensitive to equity mispricing where both the stock is undervalued and the firm is dependent on equity. Under these conditions the firm would need to issue undervalued equity to fund new investment. The suggestion is that the investment behaviours of equity dependent firms display a stronger correlation to stock prices than firms that are not dependent on equity. It is of particular interest to investigate the effect of equity-dependence on corporate investment in South Africa as developing economies often do not have access to debt due to under-developed credit markets. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/21747 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:31:43.046Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2016 |
| publishDateRange | 2016 |
| publishDateSort | 2016 |
| publisher | Department of Finance and Tax |
| publisherStr | Department of Finance and Tax |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/21747 The influence of the stock market on corporate investment Armand, Rayanne West, Darron Financial Management This paper investigates how corporate investment is influenced by the non-fundamental component of stock prices. Previous research conducted has found that investment is sensitive to equity mispricing where both the stock is undervalued and the firm is dependent on equity. Under these conditions the firm would need to issue undervalued equity to fund new investment. The suggestion is that the investment behaviours of equity dependent firms display a stronger correlation to stock prices than firms that are not dependent on equity. It is of particular interest to investigate the effect of equity-dependence on corporate investment in South Africa as developing economies often do not have access to debt due to under-developed credit markets. 2016-09-14T12:50:40Z 2016-09-14T12:50:40Z 2016 Master Thesis Masters MCom http://hdl.handle.net/11427/21747 eng application/pdf Department of Finance and Tax Faculty of Commerce University of Cape Town |
| spellingShingle | Financial Management Armand, Rayanne The influence of the stock market on corporate investment |
| thesis_degree_str | Master's |
| title | The influence of the stock market on corporate investment |
| title_full | The influence of the stock market on corporate investment |
| title_fullStr | The influence of the stock market on corporate investment |
| title_full_unstemmed | The influence of the stock market on corporate investment |
| title_short | The influence of the stock market on corporate investment |
| title_sort | influence of the stock market on corporate investment |
| topic | Financial Management |
| url | http://hdl.handle.net/11427/21747 |
| work_keys_str_mv | AT armandrayanne theinfluenceofthestockmarketoncorporateinvestment AT armandrayanne influenceofthestockmarketoncorporateinvestment |