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| Author: | Howe, J. S. Su, T. |
| Title: | Discretionary reductions in warrant exercise prices |
| Journal: | Journal of Financial Economics
2001 : JUL, VOL. 61:1, p. 227-252 |
| Index terms: | STOCK MARKETS WARRANTS |
| Freeterms: | EXERCISE PRICES |
| Language: | eng |
| Abstract: | Managers can decide to reduce a warrant's exercise price. A reduction in exercise price can induce exercise (a conversion-forcing reduction) or not (a long-term reduction). Conversion-forcing firms show an abnormal return of -1,53% on the announcement day but they perform well over the three years following the announcement. This finding suggests that the funds raised from warrant exercise are invested in profitable projects. |
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