Abstract
Previous work on the interest cost implications of the municipal bond underwriting method of sale decision has produced results asserting that competitive bid sales result in lower interest costs. However, negotiated offerings still dominate the municipal market. This paper invokes financial certification theory to explain the apparent paradox. After correcting for selection bias which is predicted by the theoretical model, empirical estimates show that for a sample of state general obligation bonds, negotiated offerings have at worst no higher and perhaps lower interest costs.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
