Regular stock market hours are Monday through Friday from 9:30 a.m.–4 p.m. EST. The stock market is closed on weekends, meaning trades aren't executed until the next trading day. There are holidays on Wall Street, too!
How do stock prices affect the investment of firms?
- The key cross-sectional prediction of the model is that stock prices will have a stronger impact on the investment of firms that are “equity dependent” – firms that need external equity to finance their marginal investments.
Do overpriced stocks have lower expected returns than undervalued stocks?
- The intuition is that overpriced stocks have lower expected returns going forward, as mispricing is corrected, while undervalued stocks have higher expected returns. This leads to the following somewhat sharper prediction.
Do non-fundamental movements in stock prices matter for equity-Dependent firms?
- After all, according to the model, non-fundamental movements in stock prices introduce volatility into the investment of the equity-dependent firms, thereby moving them away from the first best. But we caution readers against jumping to this sort of welfare conclusion, because it is quite sensitive to the
Do levered firms invest more sensitive to stock prices?
- 4is always significantly positive, indicating a strong tendency for levered firms to have investment that is more sensitive to stock prices. The results for c 1,c 2and c 3are somewhat
Regular stock market hours are Monday through Friday from 9:30 a.m.–4 p.m. EST. The stock market is closed on weekends, meaning trades aren't executed until the next trading day.