Long-term stock returns after a substantial increase in the debt ratio
Prior 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.
Volume (Year): 23 (2013)
Issue (Month): 6 (March)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:23:y:2013:i:6:p:449-460. See general 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.