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Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis

The literature on wealth effects associated with the announcements of convertible-bond and warrant-bond offerings is reviewed. The findings of 35 event studies, which include 84 sub-samples and 6310 announcements, are analysed using meta-analysis. We find a mean cumulative abnormal return of−1.14% f...

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Main Authors: Abdul Rahim, Norhuda, Goodacre, Alan, Veld, Chris
Format: Article
Published: Taylor & Francis 2014
Online Access:http://psasir.upm.edu.my/id/eprint/36010/
http://www.tandfonline.com/doi/abs/10.1080/1351847X.2012.712920
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spelling my.upm.eprints.360102016-02-15T01:11:50Z http://psasir.upm.edu.my/id/eprint/36010/ Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis Abdul Rahim, Norhuda Goodacre, Alan Veld, Chris The literature on wealth effects associated with the announcements of convertible-bond and warrant-bond offerings is reviewed. The findings of 35 event studies, which include 84 sub-samples and 6310 announcements, are analysed using meta-analysis. We find a mean cumulative abnormal return of−1.14% for convertibles compared with−0.02% for warrant bonds, the significant difference confirming a relative advantage for warrant bonds. Abnormal returns for hybrid securities issued in the USA are significantly more negative than those issued in other countries. In addition, issuing hybrid securities to refund debt does not seem to be favoured by investors. Finally, several factors identified as important by theory or in prior research are not significant within our cross-study models, suggesting that more evidence is needed to confirm whether they are robust. Taylor & Francis 2014 Article PeerReviewed Abdul Rahim, Norhuda and Goodacre, Alan and Veld, Chris (2014) Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis. European Journal of Finance, 20 (4). pp. 380-398. ISSN 1351-847X; ESSN: 1466-4364 http://www.tandfonline.com/doi/abs/10.1080/1351847X.2012.712920 10.1080/1351847X.2012.712920
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description The literature on wealth effects associated with the announcements of convertible-bond and warrant-bond offerings is reviewed. The findings of 35 event studies, which include 84 sub-samples and 6310 announcements, are analysed using meta-analysis. We find a mean cumulative abnormal return of−1.14% for convertibles compared with−0.02% for warrant bonds, the significant difference confirming a relative advantage for warrant bonds. Abnormal returns for hybrid securities issued in the USA are significantly more negative than those issued in other countries. In addition, issuing hybrid securities to refund debt does not seem to be favoured by investors. Finally, several factors identified as important by theory or in prior research are not significant within our cross-study models, suggesting that more evidence is needed to confirm whether they are robust.
format Article
author Abdul Rahim, Norhuda
Goodacre, Alan
Veld, Chris
spellingShingle Abdul Rahim, Norhuda
Goodacre, Alan
Veld, Chris
Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
author_facet Abdul Rahim, Norhuda
Goodacre, Alan
Veld, Chris
author_sort Abdul Rahim, Norhuda
title Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
title_short Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
title_full Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
title_fullStr Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
title_full_unstemmed Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
title_sort wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis
publisher Taylor & Francis
publishDate 2014
url http://psasir.upm.edu.my/id/eprint/36010/
http://www.tandfonline.com/doi/abs/10.1080/1351847X.2012.712920
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score 13.211869

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