The Long-Run Performance of Firms That Issue Convertible Debt : An Empirical Analysis of Operating Characteristics , Analyst Forecasts , and Risk Effects

@inproceedings{Lewis1999TheLP,
  title={The Long-Run Performance of Firms That Issue Convertible Debt : An Empirical Analysis of Operating Characteristics , Analyst Forecasts , and Risk Effects},
  author={Craig M. Lewis and Owen},
  year={1999}
}
Many firms issue hybrid securities such as convertible debt instead of standard securities like straight debt or common equity. Theoretical arguments suggest that firms face high debt-and equity-related external financing costs, and that convertible debt minimizes the sum of these financing costs for some issuers. Moreover, theory suggests that an appropriately designed convertible security provides efficient investment incentives. We show, however, that firms perform poorly following the… CONTINUE READING

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