search query: @author Vijayraghavan, V. / total: 1
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| Author: | Roberts, G. S. Vijayraghavan, V. Aintablian, S. |
| Title: | Stock Index-linked Debt and Shareholder Value: Evidence from the Paris Bourse |
| Journal: | European Financial Management
2002 : SEP, VOL. 8:3, p. 339-356 |
| Index terms: | DEBT MARKETS STOCKS SHAREHOLDERS |
| Language: | eng |
| Abstract: | French banks and non-financial companies issue index- linked debt whose value at maturity is indexed to the CAC 40 or to a basket of European indices. This paper examines stock announcement effects associated with these bonds on three dates: the date the issuer's General Assembly decides future capital needs, the publication in the journal of the COB (the stock market board), and the issue date. The authors find the issuance of index-linked debt has significant positive announcement effects on the issue date, which the authors attribute to its market- completion property. In order to examine further whether market completion is at play, the authors decompose the value of the bond at issue into its straight bond and option values. The authors determine that the bonds are overvalued again supporting market completion. |
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