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The Impact of REIT Ratings on Stock Price and Shareholder Wealth

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  • Klaus S. Beckmann

    ()
    (University of Texas-Pan American, 1201 W. University Drive BA-120H, Edinburg,)

  • ChanghaJin

    ()
    (Hanyang University, AnsanKyunggi-do, South Korea 426-791)

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    Abstract

    We have analyzed the market reaction to REIT preferred stock ratings announced by Moody's Investors Service from 1999 to 2009 that are related to four types of rating events; first time ratings, outlook changes, reviews and actual rating changes. The results suggest a significant market reaction to rating upgrades of 1.08% abnormal return, and downgrades and negative outlooks of -2.28% and -2.67% abnormal returns, respectively. Compared to the non-REIT literature, the abnormal returns are smaller in magnitude which implies a relatively smaller information asymmetry within the REIT market with diversification opportunities for global investors.

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    Bibliographic Info

    Article provided by Asian Real Estate Society in its journal International Real Estate Review.

    Volume (Year): 16 (2013)
    Issue (Month): 2 ()
    Pages: 134-146

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    Handle: RePEc:ire:issued:v:16:n:02:2013:p:134-146

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    Postal: Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
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    Web page: http://www.asres.org/

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    Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
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    Web: http://www.asres.org/

    Related research

    Keywords: REITs; Preferred Stock Rating; Information Asymmetry; Asset Pricing; Investment Strategy;

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