UNSPECIFIED (1999) Wealth effects of convertible bond and convertible preference share issues: An empirical analysis of the UK market. JOURNAL OF BANKING & FINANCE, 23 (7). pp. 1043-1065. ISSN 0378-4266

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Abstract

We examine the wealth effects of the announcement of issues of different types of convertible securities by UK firms and find significant negative effects on shareholder wealth. We however, also find that when the sample is partitioned by method of issue, privately placed convertible bonds, in contrast to previous research, exhibit a negative impact on firm wealth. Further, we also find negative wealth effects for firms that issue convertible securities to refinance previous debt or finance specific acquisitions. However announcements of convertible bond issues, for the purpose of financing capital expenditure schemes, show significant positive wealth effects. Finally, we find mixed support for testable predictions of the main theoretical models relating cross-sectional firm characteristics of convertible bond issuers to abnormal returns. (C) 1999 Published by Elsevier Science B.V. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HG Finance H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	JOURNAL OF BANKING & FINANCE
Publisher:	ELSEVIER SCIENCE BV
ISSN:	0378-4266
Date:	July 1999
Volume:	23
Number:	7
Number of Pages:	23
Page Range:	pp. 1043-1065
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/14390

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