INITIAL CORPORATE DEBT OFFERINGS, CERTIFICATION AND EQUITY VALUATION
An analysis of the effects of initial corporate debt offerings on the stock prices of industrial firms is presented. Empirical results from 171 initial debt offerings support the hypotheses that: 1. informational asymmetry between management and lenders can cause an adverse market reaction, and 2. t...
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| Veröffentlicht in: | Journal of business finance & accounting 1996-04, Vol.23 (3), p.399-416 |
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| container_end_page | 416 |
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| container_issue | 3 |
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| container_title | Journal of business finance & accounting |
| container_volume | 23 |
| creator | Burnie, David A. Ogden, Joseph P. |
| description | An analysis of the effects of initial corporate debt offerings on the stock prices of industrial firms is presented. Empirical results from 171 initial debt offerings support the hypotheses that: 1. informational asymmetry between management and lenders can cause an adverse market reaction, and 2. the more predicable the offering, the smaller the observed stock price change. The market cannot fully anticipate all the important details of initial offerings before they are made public on the issuance date. The flotation cost effect on a firm's stock price is also evaluated. Insignificant regression relationships between flotation cost and abnormal returns show that it is economical and rational to substitute public debt for private debt. |
| doi_str_mv | 10.1111/j.1468-5957.1996.tb01129.x |
| format | Article |
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Empirical results from 171 initial debt offerings support the hypotheses that: 1. informational asymmetry between management and lenders can cause an adverse market reaction, and 2. the more predicable the offering, the smaller the observed stock price change. The market cannot fully anticipate all the important details of initial offerings before they are made public on the issuance date. The flotation cost effect on a firm's stock price is also evaluated. Insignificant regression relationships between flotation cost and abnormal returns show that it is economical and rational to substitute public debt for private debt.</description><subject>Accounting</subject><subject>Asymmetric information</subject><subject>Corporate debt</subject><subject>Equity</subject><subject>Hypotheses</subject><subject>Public debt</subject><subject>Regression analysis</subject><subject>Securities offerings</subject><subject>Stock prices</subject><subject>Studies</subject><subject>Valuation</subject><issn>0306-686X</issn><issn>1468-5957</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>1996</creationdate><recordtype>article</recordtype><recordid>eNqVkE9PwkAQxTdGExH9Dg0HT7budrvbrhdToMVq0yoUUS-T0m4TkH92IcK3txXCwZtzmWTmvZeZH0Itgg1S1e3UIBZ3dCaYbRAhuLEeY0JMYWxPUOO4OkUNTDHXucPfztGFUlOMsUm43UDdIAqSwA21Ttx_jvtu4mldr51ose97_SDqDW60jtdPAj_ouEkQR5obdTXvZRgk79qrGw5_h5forEhnSl4dehMNfS_pPOhh3Kt8oZ5RioWe87EoxpxJbpoFTjknLC8calkptbOM0SK1clMQGwsnY7lZEI4lHucZS01a5MSiTXS9z12Vy6-NVGuYT1QmZ7N0IZcbBdRxOMVOLWz9EU6Xm3JR3QYmtTGrfseV6G4vysqlUqUsYFVO5mm5A4KhpgtTqBFCjRBqunCgC9vKfL83f09mcvcPJzy2fZcKUSXo-4SJWsvtMSEtP4Hb1GYwinrQHoT26OMpBIf-ANixikQ</recordid><startdate>199604</startdate><enddate>199604</enddate><creator>Burnie, David A.</creator><creator>Ogden, Joseph P.</creator><general>Blackwell Publishing Ltd</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>199604</creationdate><title>INITIAL CORPORATE DEBT OFFERINGS, CERTIFICATION AND EQUITY VALUATION</title><author>Burnie, David A. ; Ogden, Joseph P.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c3309-d6b9fb65e622f0a6615df8344a37cc53fa4d2917098c5d2f160e0bdc5a23fd143</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>1996</creationdate><topic>Accounting</topic><topic>Asymmetric information</topic><topic>Corporate debt</topic><topic>Equity</topic><topic>Hypotheses</topic><topic>Public debt</topic><topic>Regression analysis</topic><topic>Securities offerings</topic><topic>Stock prices</topic><topic>Studies</topic><topic>Valuation</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Burnie, David A.</creatorcontrib><creatorcontrib>Ogden, Joseph P.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of business finance & accounting</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Burnie, David A.</au><au>Ogden, Joseph P.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>INITIAL CORPORATE DEBT OFFERINGS, CERTIFICATION AND EQUITY VALUATION</atitle><jtitle>Journal of business finance & accounting</jtitle><date>1996-04</date><risdate>1996</risdate><volume>23</volume><issue>3</issue><spage>399</spage><epage>416</epage><pages>399-416</pages><issn>0306-686X</issn><eissn>1468-5957</eissn><abstract>An analysis of the effects of initial corporate debt offerings on the stock prices of industrial firms is presented. Empirical results from 171 initial debt offerings support the hypotheses that: 1. informational asymmetry between management and lenders can cause an adverse market reaction, and 2. the more predicable the offering, the smaller the observed stock price change. The market cannot fully anticipate all the important details of initial offerings before they are made public on the issuance date. The flotation cost effect on a firm's stock price is also evaluated. Insignificant regression relationships between flotation cost and abnormal returns show that it is economical and rational to substitute public debt for private debt.</abstract><cop>Oxford, UK</cop><pub>Blackwell Publishing Ltd</pub><doi>10.1111/j.1468-5957.1996.tb01129.x</doi><tpages>18</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0306-686X |
| ispartof | Journal of business finance & accounting, 1996-04, Vol.23 (3), p.399-416 |
| issn | 0306-686X 1468-5957 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_38863084 |
| source | Wiley Online Library Journals Frontfile Complete; Business Source Complete |
| subjects | Accounting Asymmetric information Corporate debt Equity Hypotheses Public debt Regression analysis Securities offerings Stock prices Studies Valuation |
| title | INITIAL CORPORATE DEBT OFFERINGS, CERTIFICATION AND EQUITY VALUATION |
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