Equity valuation effects of the issuance of convertible bonds: UK evidence
Equity valuation effects of the issuance of convertible bonds: UK evidence
The article compares the equity valuation effects of the convertible bonds, straight debt, and common equity offerings in the U.K. market. Our results on announcement dates are similar to those of studies in the U.S. in several respects. Convertible bond offerings have a significant negative impact on the underlying stock price; straight debt offerings are accompanied by a small negative stock price reaction; and rights issues have significantly negative valuation effects. A result that is at variance with U.S. results is that we find no stock price reaction on the issue date of convertible bonds.
7-18
Gwilym, Owain Ap
9639163d-b537-42e2-ab28-7aaf56d61185
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Daliakopolous, Stavros
ab9561a0-64e4-4b8d-a453-578e26c8bc71
December 1999
Gwilym, Owain Ap
9639163d-b537-42e2-ab28-7aaf56d61185
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Daliakopolous, Stavros
ab9561a0-64e4-4b8d-a453-578e26c8bc71
Gwilym, Owain Ap, Wolfe, Simon and Daliakopolous, Stavros
(1999)
Equity valuation effects of the issuance of convertible bonds: UK evidence.
The Journal of Fixed Income, 9 (4), .
Abstract
The article compares the equity valuation effects of the convertible bonds, straight debt, and common equity offerings in the U.K. market. Our results on announcement dates are similar to those of studies in the U.S. in several respects. Convertible bond offerings have a significant negative impact on the underlying stock price; straight debt offerings are accompanied by a small negative stock price reaction; and rights issues have significantly negative valuation effects. A result that is at variance with U.S. results is that we find no stock price reaction on the issue date of convertible bonds.
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Published date: December 1999
Identifiers
Local EPrints ID: 36591
URI: http://eprints.soton.ac.uk/id/eprint/36591
ISSN: 1059-8596
PURE UUID: 5d1fc0c9-a16b-4363-beff-307ba117c8ca
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Date deposited: 15 Mar 2007
Last modified: 12 Dec 2021 02:46
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Author:
Owain Ap Gwilym
Author:
Stavros Daliakopolous
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