Corporate Earnings and Financings: An Empirical Analysis
This article examines the long-term behavior of corporate earnings around three corporate financing events: sales of common stock, convertible bonds, and straight bonds. The article shows that earnings declined for all issuers and that more capital is raised the larger the earnings decline. These findings indicate that external financings are motivated by earnings declines. No evidence is found of a relationship between the size of the subsequent earnings downturn or the amount of capital raised and stock price reactions to the financing announcements. These findings suggest that security sales did not systematically provide new information about either the magnitude of subsequent earnings downturn or the amount of financing. Copyright 1990 by the University of Chicago.
If 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.
When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:63:y:1990:i:3:p:347-71. 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: (Journals Division)
If references are entirely missing, you can add them using this form.