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...
| Main Authors: | , , |
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| Format: | Article |
| Published: |
Taylor & Francis
2014
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| Online Access: | http://psasir.upm.edu.my/id/eprint/36010/ |
| _version_ | 1848848213901049856 |
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| author | Abdul Rahim, Norhuda Goodacre, Alan Veld, Chris |
| author_facet | Abdul Rahim, Norhuda Goodacre, Alan Veld, Chris |
| author_sort | Abdul Rahim, Norhuda |
| building | UPM Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-15T09:30:56Z |
| format | Article |
| id | upm-36010 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-15T09:30:56Z |
| publishDate | 2014 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-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 |
| spellingShingle | Abdul Rahim, Norhuda Goodacre, Alan Veld, Chris Wealth effects of convertible-bond and warrant-bond offerings: a meta-analysis |
| title | 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_short | 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 |
| url | http://psasir.upm.edu.my/id/eprint/36010/ http://psasir.upm.edu.my/id/eprint/36010/ http://psasir.upm.edu.my/id/eprint/36010/ |