Abstract We document an inverted‐U pattern in the frequency and magnitude of share repurchases across firms arranged into deciles (value to price), and a symmetric opposite pattern in equity issuances. These patterns cannot be explained by the market timing theory, which predicts monotonically increasing share repurchases or decreasing equity issuances across deciles. Instead, these patterns can be explained by Chen and Lambrecht (2021) theory that “cash cow” firms with a target negative net debt ratio decrease payouts to shareholders (or raise equity) after a positive revaluation of their assets captured by high ratios. We demonstrate that the hump‐shaped patterns are driven largely by such firms with negative net debt ratio and by “mature” firms with low asset growth consistent with corporate lifecycle theory.