| Tekijä: | Campbell, C.J. Ederington, L.H. Vankudre, P. |
| Otsikko: | Tax shields, sample-selection bias, and the information content of conversion- forcing bond calls |
| Lehti: | Journal of Finance
1991 : SEP, VOL. 46:4, p. 1291-1324 |
| Asiasana: | BOND MARKETS CALL OPTIONS |
| Kieli: | eng |
| Tiivistelmä: | The information content of conversion-forcing bond calls depends on the after-tax cash flow to bondholders. If the dividend after conversion exceeds the after-tax coupon but is less than the before-tax coupon, the call reveals unanticipated decreases in dividends and/or earnings that reduce the tax shield from interest payments. In contrast, a call reveals the timing of an anticipated shift from exceptional firm-specific positive growth to the industry norm. Efforts to document properties of convertible calls are subject to sample-selection bias because calls are disproportionately associated with positive pre-call firm-specific growth. |
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