Electronic Resource
Oxford, UK; Malden, USA
:
Blackwell Publishing Ltd/Inc.
European financial management
10 (2004), S. 0
ISSN:
1468-036X
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
We survey European managers to gain some insights into motivations of convertible issuance. Our analysis shows that a majority of firms issue convertibles as ‘delayed equity’ and as ‘debt sweetener’. Managers also use convertibles to avoid short-term equity dilution and to signal firm's future growth opportunities. We document a large cross-sectional variation across firms in rationales for issuing convertibles and find mixed support for most theoretical models. Our evidence suggests that the popularity of convertibles is driven primarily by their versatility in adjusting their design to fit the financing needs of individual firms, and by their increased demand among institutional investors.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1354-7798.2004.00253.x
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