TY - JOUR
T1 - Convertible call policies. An empirical analysis of an information-signaling hypothesis
AU - Ofer, Aharon R.
AU - Natarajan, Ashok
N1 - Funding Information:
*We have benefited from the comments and suggestions of Ravi Jagannathan. Robert Korajczyk, David Larcker, Artur Raviv. Daniel Siegel, Eduardo Schwartz (the referee). and Clifford W. Smith (the editor). Research assistance was provided by Stephen V. Thomas. Financial support from the Banking Research Center and the Accounting Research Center at Northwestern University is gratefully acknowledged. The usual disclaimer applies.
PY - 1987/9
Y1 - 1987/9
N2 - This paper tests an information-signaling hypothesis as a potential explanation for corporate convertible bond call policies and for the negative share price reaction to the announcement of the calls. We test this hypothesis by trying to ascertain whether the information signaled is realized. Our results show an unexpected decline in the firm's performance subsequent to the call. We also find significant negative cumulative returns during a sixty-month period following the calls.
AB - This paper tests an information-signaling hypothesis as a potential explanation for corporate convertible bond call policies and for the negative share price reaction to the announcement of the calls. We test this hypothesis by trying to ascertain whether the information signaled is realized. Our results show an unexpected decline in the firm's performance subsequent to the call. We also find significant negative cumulative returns during a sixty-month period following the calls.
UR - http://www.scopus.com/inward/record.url?scp=38249035200&partnerID=8YFLogxK
U2 - 10.1016/0304-405X(87)90030-4
DO - 10.1016/0304-405X(87)90030-4
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AN - SCOPUS:38249035200
SN - 0304-405X
VL - 19
SP - 91
EP - 108
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 1
ER -