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Corporate Sale-and-Leasebacks and Shareholder Wealth


  • Slovin, Myron B
  • Sushka, Marie E
  • Polonchek, John A


In this paper, the authors examine the market valuation effects of corporate saleleasebacks. Specifically, they test whether such transactions offer a net benefit to lessees or lessors by evaluating the impact on share prices from announcements of saleleasebacks of major corporate assets. Their evidence indicates that the announcements are associated with positive abnormal returns to lessees. They conclude that this positive market reaction results from an overall reduction in the present value of expected taxes occasioned by the transactions. The evidence also suggests that the gains from saleleasebacks accrue solely to lessee firms. Copyright 1990 by American Finance Association.

Suggested Citation

  • Slovin, Myron B & Sushka, Marie E & Polonchek, John A, 1990. " Corporate Sale-and-Leasebacks and Shareholder Wealth," Journal of Finance, American Finance Association, vol. 45(1), pages 289-299, March.
  • Handle: RePEc:bla:jfinan:v:45:y:1990:i:1:p:289-99

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    References listed on IDEAS

    1. Sharpe, William F., 1967. "Portfolio Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 2(02), pages 76-84, June.
    2. Rosenberg, Barr, 1974. "Extra-Market Components of Covariance in Security Returns," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 9(02), pages 263-274, March.
    3. Blume, Marshall E, 1971. "On the Assessment of Risk," Journal of Finance, American Finance Association, vol. 26(1), pages 1-10, March.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. João Pinto & Luís K. Pacheco, 2014. "The Economics Of Structured Leasing," Working Papers de Economia (Economics Working Papers) 04, Católica Porto Business School, Universidade Católica Portuguesa.
    2. S. Akin & Val Lambson & Grant McQueen & Brennan Platt & Barrett Slade & Justin Wood, 2013. "Rushing to Overpay: Modeling and Measuring the REIT Premium," The Journal of Real Estate Finance and Economics, Springer, vol. 47(3), pages 506-537, October.
    3. Schallheim, James & Wells, Kyle & Whitby, Ryan J., 2013. "Do leases expand debt capacity?," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 368-381.
    4. João Pinto & Mário Coutinho dos Santos, 2014. "Corporate Financing Choices after the 2007-2008 Financial Crisis," Working Papers de Economia (Economics Working Papers) 03, Católica Porto Business School, Universidade Católica Portuguesa.
    5. Noriko Ashiya, 2015. "Determinants of Potential Seller/Lessee Benefits in Sale¡VLeaseback Transactions," International Real Estate Review, Asian Real Estate Society, vol. 18(1), pages 89-112.
    6. Fayez A. Elayan & Thomas O. Meyer & Jingyu Li, 2006. "Evidence from Tax-Exempt Firms on Motives for Participating in Sale-Leaseback Agreements," Journal of Real Estate Research, American Real Estate Society, vol. 28(4), pages 381-410.
    7. Longinidis, Pantelis & Georgiadis, Michael C., 2014. "Integration of sale and leaseback in the optimal design of supply chain networks," Omega, Elsevier, vol. 47(C), pages 73-89.
    8. Andrea L. Eisfeldt & Adriano A. Rampini, 2009. "Leasing, Ability to Repossess, and Debt Capacity," Review of Financial Studies, Society for Financial Studies, vol. 22(4), pages 1621-1657, April.
    9. Ezzell, John R. & Vora, Premal P., 2001. "Leasing versus purchasing: Direct evidence on a corporation's motivations for leasing and consequences of leasing," The Quarterly Review of Economics and Finance, Elsevier, vol. 41(1), pages 33-47.

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