Abstract
This paper investigates whether the balance sheet classification of financial instruments that include attributes of both debt and equity (i.e., hybrid financial instruments) affects the stock price judgments of buy-side financial analysts. Financial economics research documents that, on average, firms announcing an offering of additional common equity securities experience a decline in the market value of their outstanding common stock. In contrast, firms financing with straight debt generally do not experience a decline in common stock market value (see Smith [1986] for a summary). Psychology research suggests that, when making
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.
