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Industry Effects And Convertible Bond Sequence

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  • Devrim Yaman

Abstract

In this paper, we study how the announcement returns of convertible bonds change for different issues in a sequence for firms in various sectors of the economy. We show that industrial firms obtain significantly lower returns in later issues of convertible bonds compared to former issues. In fact, the announcement returns for the first issue of these firms in our sample period is insignificant while the returns for later issues are significantly negative. We obtain the same result for industrial firms even after we control for other variables that affect announcement returns of convertible bonds. Our results show that the announcement returns for financial firms and utilities do not present this pattern. The returns for these firms are similar for different convertible bond issues in a sequence.

Suggested Citation

  • Devrim Yaman, 2016. "Industry Effects And Convertible Bond Sequence," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 10(3), pages 9-20.
    • Handle: RePEc:ibf:gjbres:v:10:y:2016:i:3:p:9-20
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    More about this item

    Keywords

    Convertible Bonds; Sector Analysis; Announcement Returns; Sequence of Issues;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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