search query: @author Ogden, J. P. / total: 7
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| Author: | Burnie, D. A. Ogden, J. P. |
| Title: | Initial corporate debt offerings, certification and equity valuation |
| Journal: | Journal of Business Finance and Accounting
1996 : APR, VOL. 23:3, p. 399-438 |
| Index terms: | DEBT SHARE PRICES STOCK MARKETS |
| Language: | eng |
| Abstract: | This paper is an analysis of the effects of initial corporate debt offerings on the stock prices of industrial firms; to date only seasoned offerings have been reported in the literature. Empirical results from 171 initial debt offerings support the hypotheses that: (1) informational asymmetry between management and lenders can cause an adverse market reaction. Management which did not use the market mechanisms to mitigate informational asymmetry, (i.e., obtain a rating) experienced significant stock price declines, and (2) the more predictable the offering the smaller the observed stock price change. Initial debt offerings being less predictable than seasoned debt offerings experience significant equity abnormal returns predominantly at issuance rather than on announcement. |
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