Long-term stock returns after a substantial increase in the debt ratio
AbstractPrior studies consistently indicate that the announcement of an increase in the debt ratio will be accompanied by a rise in the stock price. In attempting to examine the long-term stock returns following a substantial increase in debt, this study shows that the stock price could negatively react to the increase in debt in some cases, and that only firms with less financial risk will experience positive long-term stock returns. In addition, firms with independent directors, with a CEO concurrently serving as the chairman of the board, that are controlled by a family or with low growth opportunities are more likely to experience a better long-term stock performance after an increase in debt, suggesting that board composition and growth opportunities play central roles in determining the long-term stock returns following an increase in the debt ratio.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Financial Economics.
Volume (Year): 23 (2013)
Issue (Month): 6 (March)
Contact details of provider:
Web page: http://www.tandfonline.com/RAFE20
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.