On The Information Content Of Calls Of Convertible Securities

    Authors

    A. K. Byrd;W. T. Moore

    Comments

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    Abbreviated Journal Title

    J. Bus.

    Keywords

    POLICY; DEBT; CONVERSION; STOCK; Business

    Abstract

    Negative stock price reactions to conversion-forcing calls of convertible bonds and preferred stocks are re-examined, and most of the sample firms are shown to exhibit full price recovery by the end of the conversion period. In addition, analysts' earnings forecasts, both short-term and long-term, are found to be revised upward following call announcements for convertible bonds and preferred stocks. The combined findings cast doubt on the established belief that such capital structure decisions signal negative information about firm value.

    Journal Title

    Journal of Business

    Volume

    69

    Issue/Number

    1

    Publication Date

    1-1-1996

    Document Type

    Article

    Language

    English

    First Page

    89

    Last Page

    101

    WOS Identifier

    WOS:A1996TU44400006

    ISSN

    0021-9398

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