Title

The Information Contents Of Senior Offerings That Reduce Junior Securities

Keywords

Asymmetric and private information; Capital and ownership structure; Event studies; Financing policy; Information and market efficiency

Abstract

This study examines 196 pure leverage increases consisting of senior offerings that reduce junior securities. The following contributions not previously discovered by the senior-for-junior research are offered. First, firms for which less information exists have positive announcement period stock returns that are significantly greater than firms for which more information exists. Second, the signaling effects associated with the announcement of a premium and with adverse selection exercise a significant impact on stock returns. Last, the decrease in systematic risk, that accompanies senior-for-junior transactions, occurs almost solely for firms for which less information exists. © 1999 Elsevier Science Inc.

Publication Date

1-1-1999

Publication Title

Quarterly Review of Economics and Finance

Volume

39

Issue

3

Number of Pages

419-438

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1016/S1062-9769(99)00009-5

Socpus ID

0008104259 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/0008104259

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