Date of Award

2015

Document Type

Honors Thesis (Colby Access Only)

Department

Colby College. Economics Dept.

Advisor(s)

David W. Findlay

Second Advisor

Randy Nelson

Abstract

This study examines the announcement effects of offering convertible debt using data from the US market from 2004 to 2015. The analysis suggests that the announcement effects of convertible debt correspond to negative abnormal returns on the underlying equity. I analyze those abnormal returns using regression analysis over six windows to investigate if certain firm, market, or bond-specific characteristics affect the magnitude and direction of the announcement effects. I find that business cycle environments, credit rating, and other bond-specific characteristics do affect the abnormal returns associated with the announcement and offering of convertible debt.

Comments

Full-text download restricted to Colby College campus only.

Keywords

convertible debt, security offering, stock price impact, announcement effects

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