Information Effects Associated with Debt-for-Equity and Equity-for-Debt Exchange Offers
AbstractThis study investigates the information effect caused by a firm's change in capital structure via debt-for-equity and equity-for-debt exchange offers. The evidence suggests that the former transactions lead to abnormal stock price increases, while the latter lead to abnormal stock price decreases. In addition, findings based on analysis of bond returns and cross-sectional regressions do not lend support to the wealth transfer and tax effect hypotheses, but they are consistent with the information effect hypothesis. Copyright 1989 by American Finance Association.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 44 (1989)
Issue (Month): 2 (June)
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- Luc Renneboog & Peter G. Szilagyi, 2008.
"Corporate Restructuring and Bondholder Wealth,"
European Financial Management,
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- Renneboog, L.D.R. & Szilagyi, P.G., 2006. "Corporate Restructuring and Bondholder Wealth," Discussion Paper 2006-007, Tilburg University, Tilburg Law and Economic Center.
- Renneboog, L.D.R. & Szilagyi, P.G., 2006. "Corporate Restructuring and Bondholder Wealth," Discussion Paper 2006-23, Tilburg University, Center for Economic Research.
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