Inconsistent debt policies can lead to higher investor ambiguity, suggests research
In August 2022, Olympic Steel shifted from an inconsistently moderate working capital financing policy (WCFP) to a clear conservative policy. Within months, its stock price rose 22 percent, outperforming many of its competitors during a broader market decline, and its volatility of volatility (VOV) – a forward-looking measure of investor uncertainty – dropped by nearly half. Our research shows that this wasn’t a one-off, but part of a broader pattern. How a company structures its debt, particularly its short-term financing, can profoundly shape investor perceptions of future . . .
Log in FOR FREE to access this content
Log in or create your free My IR – Essentials account to:
- Access 50+ deep dives and best practice reports
- View 100+ news analyses and our exclusive CFO series
- Instantly benchmark your IR program with our new tool
- Save favorites and get tailored content delivered to your dashboard
- 10% off all IR forums!
Join now to make a real impact in your organization.
